Dallas Fed: Outlook for Houston Remains Positive Despite Global Economy

May 15, 2012

The Houston economy remains on a healthy track despite a global economic slowdown and concerns regarding Europe. Demand for energy and exports from emerging economies is expected to sustain Houston economic drivers. The latest report from the Federal Reserve Bank of Dallas indicates economic activity in the Houston metropolitan area grew at an annualized rate of 4.6 percent in March.

Real Estate

In Houston the single family and retail retail markets are shaking of the final remnants of recession. The outlook for Houston remains positive as a result of strengthening real estate, good energy prices and resilient international trade.

Seasonally adjusted home sales declined an average of 0.9 percent over the three months ending in April, but single-family housing starts and permits both seem to have entered positive trends. Apartment occupancy was 89 percent in March, and rental rates were up for all apartment classes over the last year and quarter.

Year to year, industrial vacancy rates fell in the first quarter. Office lease rates continue to rise as vacancy rates fall. Financing is still a constraint in all real estate markets, but activity continues to improve. 2012 is expected to see the return of speculative projects to Houston.

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