Houston’s booming startup economy a good omen for agents

by James McClister

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Not every real estate agent wants to retire an independent contractor, and not every homebuyer wants to live in a city that doesn’t foster entrepreneurs. Those things are easy to avoid in Houston, ranked in the top 10 of cities for startup activity by the Ewing Marion Kauffman Foundation.

“Entrepreneurs and the businesses they start are at the very core of the American economy,” said Colorado Governor John Hickenlooper. “Startups and growing firms create most net new jobs in America, provide opportunities for workers to advance up the economic ladder, and drive innovation forward. There is little doubt startup activity is essential to the economic health of America.”

What the governor is saying is that a city rich in startup activity is a city bound for growth – growth that is more sustainable than a local company having a particularly profitable year.

According to this year’s Kauffman Index of Startup Activity, an early indicator of the beginnings of entrepreneurship, the general trend was increased activity. The national boost builds off last year’s gain, and elevates startup activity to a point nearing its pre-Great Recession peak despite being at a 20-year low only two years ago..

Houston is No. 7

At the metro level, Houston is doing better than most – good news for agents who hope to one day open their own shop.

Though dropping seven slots on the Foundation’s index from last year (one of the steepest declines in the nation) the city remains at No. 7 for its startup activity and environment. The majority of entrepreneurs starting businesses (79.45 percent) in Houston are doing so because they saw an opportunity in the market, not because they were unemployed. The city also has a high startup density rate, which counts the number of new firms per 1,000 firm population (firm being defined here as companies “less than one-year-old employing at least one person besides the owner”).

Check out our table below to see how Houston compares.

City 2016 Rank 2015 Rank Rate of New Entrepreneurs Opportunity Share of New Entrepreneurs Startup Density
Austin 1 1 0.60% 79.88% 105.2
Miami 2 2 0.49% 78.08% 113
Los Angeles 3 4 0.51% 75.82% 91.5
San Francisco 4 9 0.46% 82.34% 82.7
Las Vegas 5 6 0.38% 77.43% 120.8
New York 6 10 0.39% 82.99% 89.1
Houston 7 8 0.40% 79.45% 94.2
San Jose, Calif. 8 3 0.31% 94.18% 87.5
Denver 9 5 0.36% 85.06% 2.2
Phoenix 10 12 0.34% 80.72% 94.5
San Diego 11 11 0.33% 81.85% 88.1
Dallas 12 15 0.33% 79.06% 93.7
San Antonio 13 7 0.28% 87.33% 84.6
Columbus, Ohio 14 13 0.37% 77.10% 71.8
Atlanta 15 14 0.37% 70.36% 92.3
Nashville 16 23.5 0.38% 69.10% 83
Riverside 17 16 0.29% 78.51% 93.3
Kansas City 18 29 0.32% 77.72% 77.9
Tampa 19 21 0.35% 67.97% 95.2
Baltimore 20 17 0.24% 86.95% 69
Orlando 21 33 0.22% 78.34% 106.6
Boston 22 23.5 0.32% 74.45% 68.5
Charlotte, N.C. 23 25 0.36% 62.28% 86.2
Cincinnati 24 31 0.25% 85.49% 62.1
Washington, D.C. 25 28 0.28% 75.76% 78.5
Seattle 26 19 0.24% 78.21% 86.1
Sacramento 27 20 0.24% 78.80% 83.3
Jacksonville, Fla. 28 26 0.18% 84.41% 93.5
Chicago 29 22 0.22% 81.34% 78
Detroit 30 35 0.26% 72.69% 74.8
Portland 31 30 0.26% 70.37% 80.9
Virginia Beach 32 18 0.21% 81.15% 68.9
Indianapolis 33 27 0.18% 82.57% 75.7
Philadelphia 34 32 0.22% 77.22% 70.3
Providence 35 34 0.17% 87.33% 60.1
St. Louis 36 38 0.22% 70.83% 86.1
Cleveland 37 36 0.15% 87.78% 55.1
Minneapolis 38 37 0.19% 73.92% 70.2
Milwaukee 39 39 0.10% 82.90% 59.3
Pittsburgh 40 40 0.12% 65.07% 52.7
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