Economist Ted C. Jones Reports Houston and Texas Real Estate Market Near Pre-Pandemic Levels

Economist Ted C. Jones recently presented an optimistic outlook for the Houston and broader Texas real estate markets, asserting that conditions have largely returned to pre-COVID-19 pandemic levels. Speaking at the CommGate Economic Outlook event in Houston, Jones highlighted that while inflation remains a concern, fundamental economic drivers such as inexpensive energy, technology, inflation-adjusted capitalization rates, and governmental policy have stabilized.

Jones, formerly chief economist for Stewart Title and Texas A&M's Real Estate Center, and currently with the Houston Association of Realtors, pointed to Texas's robust growth, including four of the nation's fastest-growing metropolitan areas. He cited the proliferation of data centers, fueled by low electricity costs, as a significant economic driver, placing Texas second nationally in data center growth. Migration data from U-Haul and United Van Lines further supports Texas's appeal to individuals and businesses.

Both commercial and housing markets are largely at pre-pandemic levels, though office occupancy remains depressed due to hybrid work models. However, Jones noted adaptive strategies, such as the $93.3 million redevelopment of The Watt in Houston from office to residential, as examples of creativity in the market. He cautioned that the Federal Reserve Bank is expected to implement at least one more interest rate hike this year due to persistent inflation.