Houston market continues to attract foreign investors
Even as negative news continues to swirl around oil prices and job losses within the energy sector, Houston’s housing market remains relatively healthy.
According to the most recent MLS report released by the Houston Association of Realtors, on a year-to-date basis, home sales were up 2.7 percent in June versus the same time last year. Inventory levels also followed an upward trend, with more new listings coming on the market.
It is no wonder that increased inventory levels, coupled with low interest rates have brought more buyers into the marketplace, many of whom are foreign investors in search of real estate opportunities in Houston.
Real estate prices in Houston also remain significantly lower than many of the other major markets of the country, further attracting buyers into the region.
While many investors are looking to buy properties for themselves, others are purchasing properties due to their income-earning potential as rental properties.
As such, local real estate professionals can attest to the large influx of foreign buyers who see the value of investing in Houston.
“Because we have such great global exposure as members of Leading Real Estate Companies of the World and Luxury Portfolio International, we are getting an influx of buyers from China, the UK, Mexico and Colombia,” said Anne Incorvia, executive vice president at John Daugherty, Realtors.
She added that the high concentration of Asian investors who had previously flocked to San Francisco and other areas of California, are now coming into Houston because of land values and more reasonable housing prices.
“It is important for people who are buying real estate for investment purposes to work with an agent who is well-versed about investing,” Incorvia said. “The agent needs to know the area and what the rental market is like in that area, what properties are currently available, how fast they are renting, what the pricing is, and also about property management options.”
Incorvia said the Energy Corridor is one of the areas of Houston that tends to have a fair number of rental properties, because of people who move here on short-term assignments with the oil industry.
As for investors who think they will find deals and steals in Houston as a result of declining oil prices, Incorvia said that it is important to set expectations up front.
“Investors have to understand our market, because the downturn in oil prices did not hit every area. Areas like the Energy Corridor were hit harder, but other areas are still booming. Real estate is local, and you really have to look at a very local micro market, and not the macro market when looking for investment,” Incorvia said.
Tim Surratt, a Realtor at Greenwood King Properties who currently serves on the HAR board of directors, said that in looking at the local market, buyers are in a much better position today than they were two years, because there are more properties available.
“This was a very high pressure market in 2014, which was very stressful for buyers and sellers. Our market is still very satisfying, but it’s just a little bit more in line with equilibrium. It’s still a seller’s market, but it is a huge market in Houston,” Surratt said.
Over the past 10 years, Surratt said that he has worked with many relocation clients from other countries, who bought properties, but decided to keep them even after moving out of Houston.
“I have clients from Canada and other places who moved here for business, and then were relocated out after three to five years, but they wanted to keep a place here, because they have roots here even after such a short time, and they don’t want to leave,” Surratt said. “So they keep their place in Houston and use it during the winter, and go back to Canada in the summertime.”
In terms of specific neighborhoods and areas of Houston that are attracting the most investors right now, Surratt said that they are really looking everywhere.
“I would say that it is all over Houston. It doesn’t matter whether you are in Sugar Land, or The Woodlands or the Galleria area, foreign investors are look- ing anywhere in Houston, and we have become a very international city,” he said.
He also pointed out that although he can’t guarantee any kind of return on investment for his clients, there are certain areas and neighborhoods in Houston that are considered very desirable.
“In general, when a location is highly soughtafter like the Galleria area, where we have a high concentration of high-rises, people who want to do a lock-and-leave and be gone for months at a time, will purchase a house or a highrise there.”
Michelle Sandlin is an awardwinning writer, journalist and global mobility industry expert. She is a frequent contributor to Worldwide ERC’s Mobility magazine, and is vice president of creative strategies at AMBER Lodging Co. Follow her on Facebook: www.facebook.com/TheMichelleSandlin and on Twitter: @MichelleSandlin. Also visit “On the Move” at blog.chron.com/ onthemove.