There’s No Place Like: Houston

The nation’s fourth largest city isn’t one to overlook. Houston is a growing metropolis where upwardly mobile people are seemingly eager to live.  It’s a market that real estate investors shouldn’t overlook, given all that the Bayou City has to offer its residents and newcomers.

A large and bustling economy

The greater Houston metropolis area – including The Woodlands and Sugar Land – has a Gross Domestic Product that exceeds Maryland’s and Colorado’s. If it were a state, the city’s $512 billion worth of annual economic activity would make it the 15th largest state by economic output. A pro-business environment with no state corporate income taxes and reasonable regulation may also explain why it’s considered a “headquarters capital”, with 44 of the Fortune 1,000 companies and 23 of the Forbes Global 2000 companies having their headquarter offices in the city.

While the energy business and NASA’s Johnson Space Center have been Houston’s claims to fame for decades, the business landscape has become more well-diversified. The city is now a hotspot for tech, and there are more than 9,000 tech firms located in the metropolitan area.⁴ The amount of venture capital that startup firms in the area were able to attract each year tripled from 1996 to 2020.

The largest city in the state of Texas is also considered a hub of international business. It is home to many of the nation’s largest international engineering and construction firms and has 16 foreign banks from nine nations. The city’s economy is also deeply tied to global trade and foreign investment, as the city has trading relationships with more than 200 countries.

Additionally, Houston is a college town and a major medical center. Rice University and the University of Houston are both Tier 1 research universities. In total, the city is home to 32 academic institutions. Houston’s Texas Medical Center (TMC) is the world’s largest medical complex. It has $3 billion in construction projects underway, and its facilities cover 1,345 acres, making it the United States’ 8th largest business district. 

All that activity means the city boasts a large number of professionals, including more than 220,000 professional, scientific, and technical service workers and more than 376,000 health-care workers, including 19,493 physicians.

The metropolitan area has a large manufacturing base, as well, as it is home to over 6,000 manufacturing establishments. These companies employ 223,706 workers, who earn an average annual wage of $88,574.

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An affordable city where everyone can feel welcome

Houston is the second most affordable big city in the nation.⁴ Among the country’s 20 biggest metropolitan areas, only St. Louis is less expensive. The cost of living in Houston is 26.4% lower than the average for these 20 big cities.

People searching for apartments in other big cities regularly experience sticker shock over the exorbitant prices. By contrast, newcomers to Houston are often pleasantly surprised to discover what they can get for their money. The average monthly rent for a one-bedroom apartment in Houston in September 2021 was just $1,160 – far below the average cost of similar apartments in New York ($2,950), San Francisco ($2,800) and Boston ($2,400).⁴ Those low prices are not a product of low demand. In fact, the growing demand for apartments in Houston enabled rents to increase 5.5% in 2021.

Even though rents in the area are low, income levels are not. In 2019, the latest year for which data is available, per capita personal income in the region was $58,890. That was 11% above the U.S. average. People also get to keep more of their income. There is no local or state income tax, a key source of appeal for newcomers to the city.

Everyone can feel welcome in Houston because it is America’s most diverse city, as recognized by WalletHub in 2021.2 Many residents have international backgrounds, as 1.6 million of the city’s residents – that is, one in four Houstonians — were born outside the United States. It is a city that is truly cosmopolitan.

A renowned culinary and cultural scene, plus hundreds of parks

Foodies with high standards have plenty of choices in Houston. In 2021, the greater Houston area received 10 semi-finalist nominations for James Beard Awards, known as the “Oscars of the food world.” The city’s dining-out options range from five-star restaurants to food trucks, which number over 1,000. The variety of choices available goes far beyond barbecue and Tex-Mex. Collectively, the region’s restaurants serve more than 80 categories of cuisine, including Cajun, Latin American, Polish and vegan, according to Yelp.com. Houston may be one of the rare places where you can find mashups of ethnic cooking styles like Viet Cajun crawfish. 

The Houston Museum District encompasses 19 museums spanning art, history, culture, nature and science. The district includes the Children’s Museum, the most frequented museum of its kind in the country.⁴ The new Kinder Building at the Museum of Fine Arts Houston draws on a collection that includes paintings by Henri Matisse and Robert Rauschenberg. It is just one of the many reasons Travel & Leisure calls Houston “an unmissable arts destination” and “one of the world’s great art cities.”3

The city’s warm weather enables people to enjoy the outdoors all year round. With 627 parks, providing 43,032 acres of parkland, 61% of the city’s residents live within a 10-minute walk of a park. The facilities in parks across the city allow people to partake in just about every sporting activity — from baseball, soccer and volleyball, to golf, tennis, and skateboarding. 

Those who want to watch elite athletes compete have plenty of options as well. In addition to the Astros (baseball), Rockets (basketball) and Texans (football), the city has pro teams for men’s and women’s soccer, rugby, and even roller derby. While a global city today, Houston also hasn’t lost touch with its roots. The Houston Livestock Show and Rodeo is the largest livestock exhibition and rodeo in the world.

For all these reasons, investors in real estate might be viewing  Houston as a desirable place to invest for many years to come. If you’re interested in opportunities in the Houston area, consider our Houston Multi-Family Equity offering on the platform today. 

References:

1. Source: “Zumper National Rent Report,” Zumper.com, 9/27/21

2. Source: “Most Diverse Cities in the U.S.,” Wallethub.com, 4/19/21

3. Source: “Houston Might Be the Most Exciting City for Art in the United States – Here’s What to See,” Travel & Leisure, 7/4/21

4. Source: “Houston Facts 2021,” Greater Houston Partnership, 7/1/21 

Unless otherwise noted, the data cited in this article comes from Houston Facts 2021, a report published by the Greater Houston Partnership.

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