Houston's real estate market has experienced several boom-and-bust cycles over the years. A sustained period of robust growth during the 1960s and 1970s gave way to a painful crash in the 1980s, when sinking oil prices eviscerated the city's (at the time) one-dimensional economy and prompted thousands of residents to flee for employment opportunities elsewhere. Beginning in the 1990s, the city committed its focus to diversifying its economy and insulating its residents and business community from the peaks and valleys of the oil markets. Its efforts have paid off, and Houston has enjoyed over two consecutive decades marked by growth, low unemployment and economic stability.

The city has long been known for its affordable housing. As of 2016, rising demand and perpetually low inventory have pushed prices up, with many residents opining that the city's housing is not as affordable as it used to be. Still, with its expansive land area — the Houston city limits alone cover 627 square miles — and a metropolitan statistical area (MSA) population of 6.25 million, Houston offers something for everyone.

Market Insights

Since 2011, Houston real estate prices have increased substantially, while inventory has shrunk and the average time from listing date to closing date has dropped considerably. According to the real estate website Movoto, the median list price in Houston in June 2011 was $154,900. In January 2016, it was $349,900. During the same time period, the median price per square foot rose from $79 to $163. Both small homes and large homes in Houston, as well as everything in between, command much higher prices in 2016 than they did in 2011.

A drastic supply reduction amid constant or rising demand invariably leads to price increases. Houston real estate offers a perfect example. In June 2011, nearly 13,000 Houston homes were listed for sale on Movoto. In January 2016, there were barely 7,000 homes listed for sale. Houston's real estate price appreciation since 2011 has featured few seasonal fluctuations, though homes have sold faster in the summer than in in the winter. For example, in December 2013, the median number of days active for Houston homes for sale on Movoto was 73; in June 2014, it was 45.

Property and Transfer Taxes

Property tax rates in Houston vary based on neighborhood, school district and whether an area is subject to municipal utility district (MUD) taxes. Generally, total property taxes range from 2 to 3% of a home's tax-assessed value. Harris County, of which Houston is the county seat, offers a homestead exemption that lowers a home's tax-assessed value by 20%. A Houston home valued at $200,000, then, is assessed at $160,000 for property tax calculations. Assuming a total property tax rate of 2.5%, the owner of this home would receive an annual property tax bill for $4,000.

Real estate transactions in Texas are not subject to a transfer tax.

Most Expensive Neighborhoods

The most expensive neighborhood in Houston is River Oaks. Located in the Inner Loop near downtown, this enclave of historic homes, many of which were built during the 1920s, features a median home price of greater than $1.5 million. Southampton Place, also in the Inner Loop directly south of the Southwest Freeway, offers luxury living and convenience to many of Houston's cultural amenities, but at a steep price tag — the median Southampton home costs $1 million.

Top Real Estate Websites

Houston real estate shoppers have several options to look for homes online. HAR.com allows users to search for Houston homes by city, ZIP code, or number of bedrooms or bathrooms or by its MLS number. The site even features a map option where users can zoom in on a specific geographical area within the city and view all homes for sale within that area. Otherwise, the national real estate sites, such as Zillow, Trulia and Realtor.com, have Houston well covered. Visitors can search specific homes for sale or view data about broader real estate market trends in Houston.

Jacksonville, Florida Real Estate Market

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