One year ago, Houston area residents were helping one another in the face of an unprecedented natural disaster: Hurricane Harvey. In the year since, they’ve gotten the region’s economic engine back to work, making Houston the #1 market in the US for job growth in July and the #2 market for single-family home sales in 2018. Our Senior Vice President of Advisory and Houston native, Scott Davis, spent the past year tracking housing activity and the rapid recovery across the metro and provides an update below.
In the storm’s immediate aftermath, Meyers Research released a forecast for recovery based on nine previous major rainfall events in the Houston area. We expected to see sales and new construction recover by March 2018 and pricing following in May 2018. As we predicted:
- New home sales reached pre-storm levels in February 2018
- New construction reached pre-storm levels in March 2018
- Average prices for detached new homes returned to pre-storm levels in May 2018
What’s behind the rapid recovery? According to the Dallas Federal Reserve: jobs. Houston’s job growth accelerated to 5.5% in the second quarter, the fastest three months of job growth since February 1998. Professional and business services, trade, transportation and utilities, and construction were the leading sectors as the market added 99,100 jobs in the twelve months ending in June. During this time, Houston’s labor force grew faster than during the fracking boom starting in 2012. The construction sector should slow as Harvey repairs wind down in 2018, but sustained recovery in oil prices should continue to drive job growth; although much of the services growth are oil-related, the energy sector has only recovered a small percentage of the jobs it lost in 2014-2016.
The region learned some hard lessons during Harvey and passed on Saturday a $2.5 billion bond issue to improve its infrastructure to better handle flooding. As the market moves forward, let’s not forget that Houston is still the nation’s energy capital, home to the world’s largest medical center, the nation’s leading exporter of goods, and its economy is growing faster than any time in the last two decades.
Contact us to find out how to participate in the opportunities created by Houston’s recovery.