The Houston neighborhoods that saw the biggest gains in home prices in 2017

by Megan Donofrio

Houston’s housing market had a strong 2017, with the majority of its neighborhoods experiencing an increase in home prices. Of all of Houston’s core neighborhoods, Memorial Park had the largest growth in median housing prices from 2016 to 2017, surging 34 percent, according to data from Paige Martin, a broker associate with Keller Williams Memorial.

“The No. 1 factor that drives home prices is jobs,” Martin said to the Houston Business Journal. “Houston has a growing economy, is creating jobs and is benefiting from a consistent inflow of relocation.”

Martin notes that Houston’s luxury neighborhoods perform very well when both oil prices and the stock market rise. Residents want to live in close proximity to both their offices and top-ranked schools, boosting home values in these areas. 

Below are the 10 Houston neighborhoods where home prices increased the most in 2017.

Houston Neighborhood 2016 Median Home Price 2017 Median Home Price Price Change
Memorial Park $1,138,472 $1,525,000 34%
Braeswood Place $675,000 $894,000 32.4%
Highland Village/Midlane $743,750 $942,000 26.7%
Memorial Close In $345,000 $407,000 18%
Montrose $575,000 $635,250 10.5%
West University $1,174,950 $1,284,000 9.3%
Galleria $270,900 $295,000 8.9%
Clear Lake $230,500 $250,000 8.5%
Memorial Villages $1,462,500 $1,582,500 8.2%
League City $244,900 $263,000 7.4%

But not every neighborhood in the Houston metro area saw an increase in median home prices last year — six experienced little to no increase, while prices decreased in 12. 

Martin attributed two main reasons for a neighborhood’s drop in home prices: Hurricane Harvey and too much new construction.

Flooding from Hurricane Harvey resulted in a considerable number of “lot value only” homes being placed on the market, thus decreasing median sales prices in neighborhoods. The other major factor that caused prices to decrease is a large quantity of new homes being built. 

“Some suburban neighborhoods, which have long commutes to job centers, have suffered from huge developments,” Martin said. “While some of these developments have done well, others have suffered because the developer has been building there for a decade — without much pricing improving. It’s difficult to sell a 10-year-old home when you’re competing with new construction that has a lower asking price than what you paid a decade ago.”

Below are the 12 Houston neighborhoods where home prices decreased in 2017. 

Houston Neighborhood 2016 Median Home Price 2017 Median Home Price Price Change
Timbergrove / Lazybrook $439,000 $435,000 -0.9%
River Oaks Area $1,975,000 $1,950,000 -1.3%
Katy $275,500 $271,500 -1.3% 
Royal Oaks Country Club $659,000 $645,000 -2.1%
Rice/Museum District $649,900 $636,000 -2.1%
Jersey Village $224,900 $220,000 -2.2%
Northwest Houston $183,000 $178,500 -2.5%
Downtown $259,000 $252,500 -2.5%
Garden Oaks Area $462,400 $447,000 -3.3%
Champions Area $237,000 $228,500 -3.6%
University & Riverside  $285,000 $272,000 -4.6%
Midtown $339,000 $320,450 -5.5%

Overall, Martin and her team are optimistic about Houston’s real estate market in 2018.

“Over the past five years, land values in 15 close-in Houston neighborhoods have appreciated by more than 50 percent,” her team wrote in a 2018 forecast study. “We believe that these trends will continue in 2018.”

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