Understanding Harris County Property Tax and Commercial Market Growth

Harris County Property Tax shifts as new construction reshapes commercial property values, impacting assessments and market trends across the region.

Trends in New Construction Permits and Value in Harris County

  • Multi-family apartments make up the largest portion of new construction permits, at 44.6%, signalling high demand for residential units, as reflected in the Harris County Appraisal District assessments.
  • The total value of new construction has steadily increased, reaching $5.8 billion in 2024, highlighting a robust commercial sector.
  • While apartments dominate permits, construction value spans across various property types, reflecting a varied commercial real estate market.

New construction trends indicate a strong demand for multi-family housing and a growing commercial construction market, according to Harris County Appraisal District.

Harris County Property Tax
Harris County Property Tax
Harris County Property Tax

Adjustments in the Harris County Office Market

  • Deliveries reached 1.07 million sq. ft., up from 830,789 sq. ft. the previous year, according to HCAD data.
  • At year-end, 721,503 sq. ft. remained under construction, a decrease from 1.9 million sq. ft. in the prior year.
  • 301,014 sq. ft. was absorbed, and vacancy rates fell slightly to 22.5%, down from 23.2% the previous year.

The office market continues to adapt to the ongoing changes brought on by the pandemic. Key metrics from the past year highlight shifts in new construction, space absorption, and vacancy rates.

Harris County Apartment Market Overview

  • Delivered 22,251 units, up from 15,780 units in the previous year.
  • 10,805 units were absorbed, but occupancy dropped slightly to 89%, down from 90.6%, according to HCAD assessments.
  • Rental rates saw a modest increase of 0.6%, while the median sales price per unit decreased to $116,544 from $135,097 in the previous quarter.

The apartment market ended 2023 with positive absorption, reflecting growth in new construction and a solid demand for units. Key metrics from the Harris County Appraisal District show a mixed trend in rental rates and occupancy.

Harris County Property Tax
Harris County Property Tax

Houston Texas Retail Sector

  • Delivered 1.0 million sq. ft., down from 1.8 million sq. ft. the previous year.
  • Absorbed 1.5 million sq. ft., while vacancy rates decreased to 6.4%, down from 6.6%, according to HCAD data.
  • Remained stable, averaging 4.4%, consistent with the previous year.

Despite market uncertainty, the Houston retail sector has shown resilience, with steady absorption and stable rental rates. Key metrics from the Houston appraisal district highlight a decrease in new construction and absorption.

Harris County Warehouse

  • Delivered 31.6 million sq. ft., up from 24.2 million sq. ft. the previous year.
  • Absorbed 17.3 million sq. ft., while vacancy rates increased to 7.0%, compared to 5.2% the previous year.
  • 34.3% of the new space was pre-leased, and quoted rates rose by 11% year-over-year.

The warehouse sector showed signs of slowdown in 2023, with a decrease in under-construction space and absorption, according to Harris County appraisal district. However, quoted rates saw a significant increase.

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