Building Costs Per Square Foot in the City of Houston (TX), USA

Newly Built House in Houston 5602 Belmark St Houston TX77033 – 3 Bed and 2 Baths with 2 x Attached Garages on Gross Floor Area 1,628 sqft – Built in 2022 – Price $310,000 (3)

Residential Construction Market Analysis in the City of Houston, USA

Building costs are 26% above the national average in the City of Houston in Texas, equivalent to the city of Anchorage (AL) and Huntsville (TX). It’s closer to Fairbanks (AL) and San Fransisco (CA) by a deviation of 1%. Houston is the 7th most expensive city to build a house in the USA. According to the National Bureau of the Economy of the United States, in the last decade, Houston has presented an accelerated economic growth, which places it as one of the metropolises with the greatest possibilities of creating the best investments and increasing the income of the state economy.

Proof of this is that over the last six years Houston went from being the number 7 economy in the United States to the number 3 active economy, after New York and Los Angeles. According to experts, real estate development in the United States is gaining popularity among millennials and international buyers looking to integrate into a more urban lifestyle.

Due to this great increase and boom in the residential real estate market in the city of Houston, we decided to dedicate an article exclusively to it. This city stands out for its beauty, growth, and airs of a small town in the body of a big city.

Keep reading as here we will show you everything you need to know about the residential construction market in this Texas city. From the projects that are coming in the next few years to the current market values, find everything in the same article.

Houston Construction Outlook

Many think that Houston, being a big city, has few investment opportunities or home purchases and that the construction outlook is very static, but fortunately, this is not the case.

This city still has a variety of options from new, old, commercial, and even unbuilt housing. This is great news for those who are interested in flipping, as they can get anything that crosses their minds, invest, recover and earn money quickly.

Not everything is buildings, Houston also has areas of residential houses. Recently, CEOs or entrepreneurs with a lot of money chose Houston as the city to live in, since taxes are lower than in other big cities. This means that large mansions similar to those you would be used to seeing in Dallas have appeared in the city.

Houston Housing Market Analysis and Forecast

Currently, the supply of housing has been going down, however, many buyers are interested despite the pandemic. A very interesting fact indicates that during October 2020 there was an increase of 35.1% in total home sales. Some studies report that this decline in housing inventory is the most notable in the last 13 years. Without a doubt, it is a great time to invest in real estate in Houston.

In October 2021, sales increased and it was not an isolated case, this trend indicates that this period has been the fifth consecutive month with growth in sales. In addition to these annual data, during 2021 there was a growth in home purchases of 7.7%, compared to the same period in 2020.

This increase is expected to be replicated, and in fact, it is believed that during 2022 the annual increase will be 10%. In 2022, 9,700 units were sold in May, which is almost 48% more than what was sold in May of last year.

Low-interest rates are contributing to these record numbers in the real estate market with sellers benefiting the most, but creating some complications as inventory remains limited. This increases competition among buyers, generating a rise in prices. Out-of-state buyers arriving in the Houston area are willing to pay up to $100,000 more than the asking price, resulting in higher prices.

Houston Average House Price (Median Home Price)

The value of the median home in Houston in June 2022 is $345,000, 5% more than in the same period last year. Do not forget that the median home values are obtained through an average of the value of all residential properties for sale, so you can find values higher or lower than this.

In the outskirts of Houston, this average value drops to $302,000, and in the central avenues of the city, it rises to $500,000. So remember that you can find a bit of everything when it comes to home values and construction types.

The price of a median home in the best areas of Houston is expected to reach $450,000 by the end of 2022, so now is a good time to buy before this increase in values arrives.

Proposed Residential Building Projects in Houston

With the focus of adding value to the city of Houston, in recent years different groups of investors have been in charge of filling it with luxurious real estate development projects. The most common residential projects in Houston during the last 5 years are those of high rise, mid-rise, and mixed uses.

Some of the projects you may have heard about are the Astoria project, a residential tower in the Galleria area of ​​Houston. Another is the Block 384 Project, an eight-story building with 240 apartments in the heart of Houston, in the Downtown area.

One project that is still in development is the project known as Arabella. It is strategically located near the most prestigious shopping centers in Houston. The Arabella building is located three blocks from the Galleria, and next to the River Oaks District. This luxurious development in Houston consists of 33 stories with 99 condominiums. It features penthouses with private pools on the upper floors and most have private elevator entrances. With prices starting at $850,000, Arabella represents luxury and prestige for a big city.

As you can see, the main projects are related to luxury and tall buildings, to transform the image of Houston into that of a modern city, worthy of competing with other giants such as NY or LA.

Outside of Houston, there are some residential housing projects for all types of families, but mainly middle-income families. These houses have 3 or more rooms, a kitchen, two bathrooms, and a large garden that counteracts the landscape of the buildings mentioned above.

Newly Built House in Houston Texas 7202-7202 Avenue J#B Houston TX77011 – 3 Bed and 2 Baths with Parking Space on Gross Floor Area 1,225 sqft – Built in 2022 – Price $269,000 (7)

Building Costs Per Square Foot for Single Family Homes in the City of Houston (TX), USA

Building costs are 26% above the national average in the City of Houston in Texas, equivalent to the city of Anchorage (AL) and Huntsville (TX). It’s closer to Fairbanks (AL) and San Fransisco (CA) by a deviation of 1%. Houston is the 7th most expensive city to build a house in the USA.

Class 1 – Luxury Single Family Homes

The building cost per square foot for luxury private homes in Houston City ranges from $434.56 per sqft to $666.16 per sqft, with the average being $512.85 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 2 – Semi Luxury Single Family Homes

The building cost per square foot for semi-luxury private homes in Houston City ranges from $264.11 per sqft to $404.84 per sqft, with the average being $311.68 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 3 – Best Standard Single Family Homes

The building cost per square foot for best-standard private homes in Houston City ranges from $170.73 per sqft to $259.32 per sqft, with the average being $199.89 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 4 – Good Standard Single Family Homes

The building cost per square foot for good-standard private homes in Houston City ranges from $124.60 per sqft to $191.08 per sqft, with the average being $147.05 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 5 – Average Standard Single Family Homes

The building cost per square foot for average-standard private homes in Houston City ranges from $101.14 per sqft to $154.89 per sqft, with the average being $119.26 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 6 – Minimum Standard Single Family Homes

The building cost per square foot for minimum-standard private homes in Houston City ranges from $79.77 per sqft to $122.27 per sqft, with the average being $94.10 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.