Houston’s improving economy is providing momentum for commercial property values during the first months of 2019, according to a release from Deal Sikes, a leading Houston-based valuation firm.
“Commercial property in the Greater Houston area is showing strength across the board,” Mark Sikes, principal with Deal Sikes, said in the release. “Job growth is strong, unemployment is low and there is sufficient demand to absorb the wave of new construction.”
Sikes also noted that the Houston area unemployment rate recently fell to 3.1 percent, the lowest it has been since 1981, according to the Texas Workforce Commission.
“In general, economic conditions in the first quarter have translated into increased demand and rising real estate valuations. There is an emerging trend for broad-based appreciation in commercial property values,” Sikes added.
The Harris County Appraisal District reported that 89 percent of the commercial properties in the county showed increased valuations for tax purposes in 2019. Only 6 percent of HCAD valuations decreased. It was the most widespread set of increases in commercial property valuations by HCAD in more than a decade, according to Deal Sikes.
“Tax appraisals have no use in developing individual valuations, but the HCAD statistics point to a pronounced trend for increased property prices in the Houston area,” Sikes said. “That trend should carry forward into 2020.”
Most sectors of Houston’s commercial real estate market are in a healthy growth mode in 2019, said Matthew Deal, principal with Deal Sikes.
“Industrial real estate is exceptionally strong and many developers are responding with active development and acquisition programs,” Deal said.