HOUSTON--(BUSINESS WIRE)--Houston’s improving economy is providing momentum for commercial property values during the first months of 2019, according to Deal Sikes, a leading Houston-based valuation firm.
“Commercial property in the Greater Houston area is showing strength across the board,” said Mark Sikes, principal with Deal Sikes. “Job growth is strong, unemployment is low and there is sufficient demand to absorb the wave of new construction.”
Sikes 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 said.
The Harris County Appraisal District reported that 89 percent of the commercial properties in the county showed increased valuations for tax purposes in 2019. HCAD valuations were unchanged in only 5 percent of the commercial properties and only 6 percent decreased in value. It was the most widespread set of increases in commercial property valuations by HCAD in over a decade. By comparison, only 19 percent of Harris County’s commercial parcels had tax appraisal increases in 2010 when the economy was soft.
“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. Multifamily and retail are also healthy sectors,” Deal said. “The Houston office market has stabilized and taken significant steps toward a recovery. Overall, the Houston real estate market appears to be in the midst of another excellent year.”
Deal Sikes provides valuation and counseling services for real estate firms, governmental agencies, law firms, and investors across the region. www.DealSikes.com