Dec. 07–There hasn't been much good news for Houston's real estate sector in recent months, with the oil-fueled building wave crashing onto the rocks of a price collapse.
Office vacancy rates now stand at 17.1 percent, according to the most recent report from Colliers. Marcus & Millichap expects apartment vacancies to rise to 7 percent by the end of the year, up from 5.8 percent in the third quarter. Hotel revenues per available rooms have been declining, as new facilities come online, with fewer business travelers to fill them.
But here's the bright side: All that new inventory hasn't been performing so badly that developers can't afford to pay back the money they used to build it. According to data from real estate analytics firm Trepp, the rate of loans that are more than 30 days delinquent has fallen to a post-financial-crisis low in Houston and Texas' other large cities.
At less than 1 percent, Houston's delinquency rate is the second-lowest in the state's largest cities, behind Austin. And the state is doing much better than the nation as a whole, where the delinquency rate has been creeping up all year, reaching five percent this month.
That could change as finances worsen for some of these buildings, but so far, there aren't many signs of trouble.
