Move Over Chicago; Houston is Inching Closer
In this EXCLUSIVE, Houston’s population grew dramatically, moving closer to becoming the third-largest city as Chicago’s population continues to decline, according to Census Bureau stats.
HOUSTON—The Census Bureau’s recently released population estimates show Houston’s population grew dramatically, moving closer to becoming the nation’s third-largest city, as Chicago’s population continues to decline. More people will point to the need for additional housing in an area that is already the nation’s third-largest metro in apartment absorption, according to Berkadia.
Will this inspire developers to begin building again, and will investors and businesses follow? In this exclusive, Tucker Knight, senior managing director, Berkadia, recently discussed what this latest population data might mean for the housing market in Houston.
GlobeSt.com: Houston’s population grew by about 8,200 people in 2017–edging it closer to seizing the title of third-largest city from Chicago. Does that increase in population surprise you and to what do you attribute it?
Knight: Houston’s such a desirable place to live I’m actually surprised it didn’t grow more. We’ve created a million jobs in 10 years here. If you can name any other market that has been that robust, I’d like to know of it. Everything we have going on here economically with the ports, transportation, the medical centers and the oil/gas sector, and the fact that it’s a great distribution center for goods and services going East or West, make us a very desirable city to live and invest in.
GlobeSt.com: What does that mean for the housing market in Houston? Do you think numbers like this might inspire/encourage any new construction, or is it too soon to tell?
Knight: To have all these demand drivers with no new supply in the pipeline is going to make the housing market tighten quite a bit. On the single family side, there hasn’t been much new development and most of the overbuilt multifamily product is being absorbed. So with rents on the uptick and vacancy stabilizing, that is the recipe for new construction. I think you will see a robust development pipeline coming out of this in the latter part of 2018 and 2019 to 2020. We’re seeing a vast amount of capital available and buyer pools deepening for every transaction. Those are all positive trends for what lies ahead.
GlobeSt.com: What’s this Chicago-Houston rivalry about and what would you tell an investor who was considering Chicago over Houston?
Knight: Chicago has panache–it’s a historic city and a strong trading hub. But in today’s day and age, Texas is a much more business-friendly state. Houston is a good wholesome city full of entrepreneurs and very resilient. For all the reasons mentioned above, it’s an economic force to be reckoned with.