The towering cranes, the skeleton frames, the glossy signs advertising new luxury apartments and condos on Inner Loop lots previously overgrown with nothing but weeds: They’ve become such a part of the modern Houston landscape that they barely register anymore. These buildings have served as signposts of the city’s prosperity and growth, constructed to house the people flocking here to live and work.
But along with those rising structures come rising concerns. While roughly 66 percent of real estate experts polled by Zillow recently said that Houston has “no significant risk” of a housing bubble occurring soon, not everyone agrees with that sunny assessment. “I’m very concerned about the overbuilding in apartments,” Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, recently said.
And he’s not alone: That fevered building pitch appears to be close to completion, at least for now. While Houston has added 47,500 apartment units since 2013—with 20,000 added last year alone, and 29,000 more in the works—development is slowing with the economy.
The good news? All of these new projects, combined with the recent downturn, may have the effect of safeguarding something that Houston holds dear: its famous affordability. Last year, rents reached an all-time high, as did average condo prices. This year, while many condos—especially new ones—will remain hugely high-end, rates for apartments are likely to decrease. Tenants could be in for a bargain in 2016 as landlords offer more incentives, such as free rent, to lure them in.
“For the past, gosh, 10 years, we’ve seen an increase in rental rates year-over-year,” says Shannon Chapman, a realtor with John Daugherty who’s been snagging a heretofore-unheard-of two months’ free rent for some of her clients, a perk she credits to the cool-down period Houston is entering. “I’ve finally seen them stabilize, which to me means we have enough, and we’re trying to fill them now.”
That’s where you come in. With so many options readily available, how do you go about beginning your next big move? Do you take a chance on a condo or ride it out in a rental? Are those top-of-the-line amenities really worth the added cost, or are you better off taking out your own dry cleaning and parking your own car? Do you push for those two months’ free rent or count yourself lucky you found an open unit within walking distance of your favorite grocery store?
We may not be able to answer those questions for you, but we can certainly give you the guidance you need to answer them for yourself. Just invite us to your housewarming party when you finally find the perfect place; we’ll bring the beer.