The short-term rental market in Houston, Texas, has experienced significant growth in recent years, with more and more people opting to rent out their properties as short-term rentals. As the city continues attracting tourists, business travelers, and even locals seeking a quick getaway, it is crucial to closely examine the latest data trends surrounding this market.

In this edition of STR Trends by STR Intelligence, we will delve into the current state of short-term rentals in Houston and explore key insights that shed light on its evolving landscape. By examining occupancy rates, pricing fluctuations, popular neighborhoods for rentals, and other valuable metrics, we aim to provide a clear understanding of the dynamic nature of the short-term rental market in Houston.

Whether you are an investor looking to capitalize on this trend or simply curious about how it shapes the city's accommodation options – join us as we embark on this enlightening journey through the latest trends fueling Houston's booming short-term rental industry.

The City

Vibrant Culture and Diversity

With its rich cultural heritage and diverse population, Houston offers an inclusive experience that attracts tourists from all over the world. The city boasts a thriving arts scene with renowned museums such as the Museum of Fine Arts and the Houston Museum of Natural Science. Additionally, visitors can explore various neighborhoods like Chinatown and Little India, which showcase different cultures through their authentic cuisine, festivals, and shops.

Delicious Culinary Scene

Houston's food scene is a major draw for tourists seeking culinary adventures. The city showcases a wide array of cuisines ranging from Tex-Mex to Vietnamese to Nigerian. Visitors can indulge in mouthwatering barbecue at popular joints like Gatlin's BBQ or savor fresh Gulf seafood at acclaimed restaurants such as Pappas Seafood House. Houston's reputation as one of America's most exciting dining destinations truly makes it an attractive location for food lovers.

Outdoor Recreation Opportunities

Houston offers ample opportunities for outdoor enthusiasts to engage in recreational activities amidst its stunning natural beauty. With over 20 parks across the city, visitors can enjoy jogging trails, picnic spots, bike rentals, and even kayaking along Buffalo Bayou Park. Nature lovers will appreciate exploring the lush greenery at Hermann Park or admiring exotic plants at the Mercer Botanic Gardens. Boasting mild winters coupled with countless outdoor attractions make this culturally vibrant metropolis a top-notch tourist destination year-round!

Airport

One of the busiest airports in the United States, George Bush Intercontinental Airport (IAH) serves as a major travel hub for both domestic and international flights. Located approximately 23 miles north of downtown Houston, IAH covers an area of over 11,000 acres and has five terminals. With more than 180 non-stop destinations worldwide, it offers extensive connectivity options for travelers.

Key features of George Bush Intercontinental Airport

1. Terminal layout: The airport has five terminals labeled A through E. Each terminal is equipped with modern amenities such as shops, restaurants, and lounges to ensure a comfortable stay for passengers.

2. Transport options: Various transportation services are available to facilitate easy access to and from the airport. These include taxis, shuttles, ride-sharing services like Uber or Lyft, rental cars, and public transportation via the Metropolitan Transit Authority (METRO).

3. Shopping and dining: Travelers can explore a wide range of retail stores offering clothing, electronics, books, souvenirs, and more at each terminal. They can also choose from numerous restaurant options serving local delicacies as well as international cuisine.

4. Lounges: For those seeking privacy or enhanced comfort during their time at the airport, Government Run Lounges offer exclusive facilities like complimentary food and beverages, Wi-Fi access, newspapers, magazines, and shower facilities. Some airlines also have their own private lounges for eligible passengers.

5. International arrivals: As one of the leading gateways to North America, Houston's airport facilitates international travel by providing designated customs & immigration checkpoints within each terminal. Passengers arriving on international flights will need to complete necessary protocols before continuing onward journey.

Weather

• Houston experiences a subtropical climate, with hot and humid summers and mild winters.

• Summers in Houston can be scorching, with temperatures often reaching the high 90s Fahrenheit (high 30s Celsius).

• Winters are generally mild, with average temperatures ranging from the upper 40s to low 60s Fahrenheit (around 10 to 15 degrees Celsius).

• Spring and fall offer more pleasant weather, with temperatures ranging from the upper 60s to mid-80s Fahrenheit (around 20 to 30 degrees Celsius).

Travel Season

• The best time to visit Houston is during spring or fall when the weather is more comfortable.

• Spring brings blooming azaleas and bluebonnets, making it an ideal time for outdoor activities and enjoying nature.

• Fall offers cooler temperatures and vibrant foliage colors, providing perfect conditions for exploring parks or attending festivals.

• Summer can be sweltering in Houston, but it's also peak tourist season due to school vacations. Expect crowded attractions and higher prices during this time.

• Winter months tend to be quieter for tourism in Houston, but visitors can still enjoy milder weather compared to other parts of the country.

Market Data

Now that we’ve examined what makes Houston so favorable to visit let’s dive into the data.

It is important to note that this data is as accurate as Q2 of 2023. While we do our best to accumulate the most up-to-date information, please research before making any investment decision.  

In the following sections, we will take a deep dive into the wealth of Houston’s real estate data, STR data points such as occupancy rates, average daily rate for the market, guest demographics, and the impact of regulations.

Real Estate

Since 2020, Houston has seen a surge in travel and new residents flocking to the city. Houston Metro welcomed over welcomed more than 336,000 residents during that time.

Even though there’s been a wave of new residents, Houston rent has not drastically changed in comparison to other markets. The average monthly rent for a one-bedroom apartment has decreased by 2% in the last year, according to Zumper.

Buyer’s Market

Regarding purchasing a home, Houston's median housing prices have reached around $349,600, according to Realtor.com. With housing prices flat year-over-year since 2021 and over 12,000 listings for sale, the supply of homes is greater than the demand for homes meaning the Houston market is currently in a buyer’s market.

Other Numbers to Factor

• Number of Listings for Sale: 12,485

• Median Property Price: $349,600

• Median Price per Square Foot: $183

• Median Sold Home Price: $312,500

• Days on Market: 37

• Number of Long-Term Rental Listings: 14,421

• Number of Short-Term Rental Listings: 6,908

• Short-Term Rental ROI: 8%

• Short-Term Rental Revenue: $24,946

• Average Daily Rate: $148

• Occupancy Rate: 52%

• Walk Score: 48

• LGBTQ+ Friendly: Yes

• Minority friendly: Yes

• Nightlife: Tons of options

• Tap Water Safe: 👌Yes! Generally Safe to Drink

• Lack of Crime: Good

It is important to note that this data is as accurate as Q2 of 2023. While we do our best to accumulate the most up-to-date information, please do your research before making any investment decision.

Popular Neighborhoods

Houston, Texas, is filled with diverse and vibrant neighborhoods that attract visitors from all over. By analyzing the latest short-term rental data trends, we can determine which neighborhoods are the most popular among travelers.

1. Montrose: Known for its eclectic arts scene and lively nightlife, Montrose tops the list as one of Houston's trendiest neighborhoods. It offers a wide range of unique short-term rental options, including quaint guesthouses and stylish apartments.

2. The Heights: With its charming mix of historic homes and trendy eateries, The Heights has become a favorite choice for travelers seeking an authentic Houston experience. Short-term rentals in this neighborhood often boast picturesque views of downtown or lush green gardens.

3. Midtown: Situated just south of downtown Houston, Midtown attracts visitors with its abundance of hip bars, restaurants, and art galleries. Its central location makes it a convenient base for exploring everything Houston has to offer.

Regulations

Currently, Houston does not have any STR regulations; however, that could soon be changing. On March 23, 2023, the city, in conjunction with Airbnb, held a meeting to review Airbnb’s trust and safety tools, described how residents may report complaints, and explained how the platform works to enforce the company's global party house ban.

With both major and smaller cities around the country passing regulations on short-term rentals, it would not be unfathomable that Houston may soon follow suit.

These potential regulations are likely to evolve in response to the city’s growth and the concerns of local communities. As the market matures, policymakers may introduce new regulations to address zoning, licensing, and taxation issues. Striking a balance between the needs of STR operators and the interests of local communities will be a crucial focus.

Changes in regulations can have both positive and negative impacts on the market. While regulations can ensure responsible growth and protect the integrity of neighborhoods, they may also impose additional compliance requirements and operational costs on property owners and investors. It will be crucial for stakeholders to stay informed about regulatory changes and adapt their strategies accordingly, which you can do using STR Intelligence.

The Future

Resident Growth

According to a study by Site Selection Group, Houston's population could balloon to more than 8 million residents in the next five years. This projected 9.82 percent population growth would make it the second-fastest growing metro area behind Austin.

Events

It’s no secret that North America will be hosting the World Cup in 2026, and Houston will be one of the host cities. Looking closer, the city will be home to events like the 2024 College Football Playoff and 2025 NCAA Mens Basketball Tournament, with their eye on a 2029 NFL championship bid. With world-class stadiums and arenas that play host to thousands of shows, tours, and other events each year, I don’t see the money train stopping anytime soon.

Development

They say everything is bigger in Texas, and that is very true when it comes to land. Houston has made a major push to expand its offerings downtown, announcing in 2017 their 20-year plan to improve the visitor appeal, business climate, livability, and connectivity within and around Downtown Houston. This includes building 12,000 additional Downtown residential units and adapting downtown streets to accommodate autonomous cars.

This is a vital sign that Atlanta is focused on expanding what it offers to residents and tourists alike.

Tourism

Houston's short-term rental market is characterized by fluctuating occupancy rates, indicative of constantly changing demand. Data shows that these rates have ranged from as low as 50% during off-peak seasons to over 90% during major events and holidays.

Factors such as local festivals, sporting events, conferences, and seasonal variations greatly impact the occupancy rates. The influx of 25 annual visitors during popular times can drive up prices and create high competition among hosts.

With no STR regulations, and reasonably priced homes and apartments, I believe Houston’s STR market will continue to be a profitable bet in the coming years.

Technology

Technological advancements will play a significant role in shaping the future of Houston’s STR market. As data collection methods improve and become more sophisticated and simpler to use and understand, stakeholders will have access to more accurate and real-time data. Advanced analytics tools and machine learning algorithms will enable deeper insights and predictive analytics, empowering stakeholders to make data-driven decisions with greater precision.

The integration of smart home technology in STR properties will also impact data analysis. IoT devices and automation systems can provide real-time data on occupancy, energy usage, and guest preferences. This data can help streamline operations, optimize resource allocation, and enhance the guest experience.

Evolving Guest Preferences and Demands

When it comes to choosing a short-term rental in Houston, travelers have specific preferences and expectations. Understanding these can help hosts provide an exceptional experience for their guests. Here are some key insights from the latest data trends:

1. Location is paramount: The majority of short-term rental guests prioritize staying in neighborhoods that offer convenient access to popular attractions, shopping centers, and dining options. Proximity to public transportation is also highly valued by travelers who want to explore the city without relying on cars.

2. Amenities matter: Guests expect certain amenities when booking a short-term rental property. High-speed internet, air conditioning, free parking, fully equipped kitchens, and comfortable beds are among the top amenities desired by travelers.

3. Cleanliness is crucial: Cleanliness plays a significant role in guest satisfaction. Travelers expect their accommodations to be clean upon arrival and well-maintained throughout their stay. This includes fresh linens and towels, tidy bathrooms, and spotless common areas.

Conclusion

In this comprehensive STR Trends guide, we have explored the fascinating world of Houston’s STR data and its significance in understanding the dynamic short-term rental market. We delved into the real estate market, local attractions, peak tourism season, STR regulations, and our take on the future of the Houston market. By harnessing this data, stakeholders gain valuable insights into making savvy investment decisions.

Looking towards the future, we anticipate continued growth in the Houston STR market, fueled by the city's attractions and the rising popularity of alternative accommodations. Technological advancements will shape data analysis, providing stakeholders with more accurate and real-time insights. Regulation changes will impact the market, requiring stakeholders to stay informed and adapt their strategies accordingly. Additionally, guest preferences are expected to evolve, with a focus on personalization, sustainability, and seamless technology integration.

As the Houston STR market continues to thrive, it is essential for stakeholders to embrace data-driven approaches. By leveraging Houston STR data, they can make informed decisions, optimize their strategies, and contribute to the sustainable growth of the STR industry in this vibrant city.

Now armed with a deeper understanding of Houston’s STR Trends, it is time to unlock the potential of your next investment.

Dive into the ins and outs of Houston’s STR data with STR Intelligence, and let it guide you toward success in Houston's flourishing short-term rental market.