The Houston Market

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The Houston Market
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Houston DMA, CMSA, PMSA and the City of Houston
The Houston Designated Market Area
DMA Population 5.3 million Including 19
counties Austin, Brazoria, Calhoun, Chambers,
Colorado, Fort Bend, Galveston, Grimes, Harris,
Jackson, Liberty, Matagorda, Montgomery, Polk,
San Jacinto, Walker, Waller, Washington and
Wharton.
The 10th largest DMA in the nation and
growing-almost twice as fast as the nation, as a
whole. The DMA is defined by Nielsen Media and
is more commonly known as the television or
broadcast market.
The Consolidated Metropolitan Statistical Area
CMSA Population 4.9 million Including eight
counties Brazoria, Chambers, Fort Bend,
Galveston, Harris, Liberty, Montgomery, and
Waller.
The 10th largest CMSA in the nation
The 4th largest city in the nation
Primary Metropolitan Statistical Area
PMSA Population 4.4 million Including six
counties Chambers, Fort Bend, Harris, Liberty,
Montgomery, and Waller.
The City Of Houston Population 2.0
million Includes portions of Harris, Fort Bend
and Montgomery.
The 9th largest PMSA in the nation
Source Demographics USA 2003
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Houstons explosive growth is driven by
diversity.
Were one of the most ethnically diverse cities
in the nation, and growing more so almost twice
as fast as the entire United States.
3,340,392
884,431
1,546,896
260,467
Source Demographics USA 2002, Houston DMA
Percentages total more than 100 because Hispanics
can be of any race.
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The Hispanic Population is Dominating the Growth
in Houston

• From 1990 - 2000 the Hispanic population in
  Houston grew at a rate of 63, equating to the
  addition of more than 539,000 Hispanics within
  the PMSA.
• Based on the 2000 Census, the Houston Hispanic
  population now exceeds 1.2 million.

Source U.S. Census Bureau, 2000 Census
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Ten-Year Projections Show the Hispanic Population
Accounting for the Majority of Houstons Growth
Ethnic Share of Houston Growth 2000 2010
Projections

• 72 of all growth within the PMSA will be
  Hispanic

Source Texas State Data Center Projections
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Houston Hispanic Population Distribution
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At a glance,the diverse faces of Houston have
market appeal.
Hispanic Houstonians Employed full-time,
majority in white-collar occupations.

• Median HHI of 39,912
• Married with Children
• Homeowners
• 12.1 billion in consumer buying power
• Research has shown that per-household
  consumer buying power increased 118 among
  Hispanics from 1990 to 2000. In comparison,
  buying power in the general market grew only
  68 for the same time period.

Sources Scarborough Report 2003 U.S. Hispanic
Market, 2002 Demographics USA 2002 Strategy
Research Corporation Selig Center for Economic
Growth U.S. Census Bureau
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At a glance,the diverse faces of Houston have
market appeal.
Asian-American Houstonians Houstons growing
Asian population (within Harris County) has grown
76 since 1990, ranking 12th in the nation and
1st in the State of Texas.

• Median HHI of 50,116
• Married with Children
• College-educated
• Employed in white-collar occupations

Sources Scarborough Report 2003 U.S. Hispanic
Market, 2002 Demographics USA 2002 Strategy
Research Corporation Selig Center for Economic
Growth U.S. Census Bureau
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At a glance,the diverse faces of Houston have
market appeal.
African-American Houstonians Houstons
African-American population ranks 8th in the
nation and 1st in the State of Texas.

• Median HHI of 39,859
• Children in household
• Homeowner
• Employed in white-collar occupations

Sources Scarborough Report 2003 U.S. Hispanic
Market, 2002 Demographics USA 2002 DMA
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At a glance,the diverse faces of Houston have
market appeal.
The average Houstonian

• Employed full-time in white - collar occupations
• Median HHI of 48,281
• Married
• Homeowner
• College-educated having completed some college
  or holding one or more degrees
• Younger on average than any other major U.S.
  metro area
• Median age is 41.5 years

Sources Scarborough Report 2003 U.S. Hispanic
Market, 2002 Demographics USA 2002 Strategy
Research Corporation Selig Center for Economic
Growth U.S. Census Bureau
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Economic Brief

• There are three main factors that have influenced
  the Houston economy over the past decade. These
  factors are
• Health of the national economy
• Energy prices
• Value of the dollar against major foreign
  currency

Sources Greater Houston Partnership
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Gross Domestic Product

• As we move into 2004, the U.S. economy appears to
  be slowly moving into expansionary mode. After
  averaging 2.6 annualized growth during the first
  six quarters following the 2001 recession, GDP
  growth finally rebounded during Q3 of 2003.
• Economists widely concur that real GDP growth is
  expected to exceed 4 during 2004.

Sources Greater Houston Partnership
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Energy

• Energy prices have remained relatively high
  throughout 2003
• Benchmark prices for domestic light crude were
  above 25/bbl in 2003
• Natural gas prices dipped briefly to below
  4/mcf, but averaged over 5 for the year
• Speculation is growing that 4 represents the new
  plateau for spot gas prices. This is good news
  for Houstons upstream sector, but bad for the
  petrochemical manufacturers that rely on natural
  gas feedstocks.

Source Greater Houston Partnership
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Value of the Dollar

• The value of the dollar against foreign currency
  has fallen 20 since its peak in February 2002
• This signals increasing potential for Houstons
  exports of goods and services

Source Greater Houston Partnership
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Job Growth

• Houstons job market finally turned the corner in
  4th quarter 2003. A total of 6,500 jobs were
  added in 4th quarter 2003.
• The Health and Services category represented the
  highest area of growth, followed by government.
  The Business Services sector continues to be weak
  with a loss of 900 jobs during the 4th quarter.

Sources Greater Houston Partnership Texas
Workforce Commission The Houston MetroStudy
Data is not seasonally adjusted
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Houston 2003 Job Growth by Sector
Source The Houston MetroStudy
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While Unemployment Remains Slightly Above the
National Average, Rates Dipped Below the 6 For
December 2003

• The Unemployment Rate stood at 5.9 in Houston
  for December 2003.
• The U.S. as a whole had 5.7 unemployment in
  December 2003.

Sources Greater Houston Partnership Texas
Workforce Commission The Houston MetroStudy
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Houstons Unemployment Rates Have Tracked with
The Nation, But Jumps in 2nd and 3rd Quarter were
Higher than National Averages

• June 03, Houstons 7.6 percent rate was
  negligibly above the statewide figure of 7.5
  percent, but both were substantially higher than
  the nationwide rate of 6.5 percent. (No rates are
  seasonally adjusted.)

Sources Greater Houston Partnership Texas
Workforce Commission
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Net Job Growth is Anticipated in 2004

• The Greater Houston Partnership projects nonfarm
  payroll employment in the six-county Houston PMSA
  to grow on the order of 1.5 in 2004, or 31,000
  jobs.

Sources Greater Houston Partnership Texas
Workforce Commission
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Where will the Growth Come From?

• Job growth is projected to come from the
  following sectors
• Healthcare/Social Assistance
• Accommodation and Food Services
• Wholesale Trade
• Construction
• Professional and Business Services
• Retail Trade
• Government
• Manufacturing is the only large sector not
  expected to grow in 2004

Source Greater Houston Partnership
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Housing Market

• 2003 was another record year for Houstons
  housing market. The homebuilding industry
  reached an unprecedented level with 38,278 new
  home starts in 2003.
• Fourth quarter was a record quarter with 8,828
  home starts, the highest number of starts of any
  fourth quarter in over 20 years.
• New home closings were also at record highs,
  10,048 homes closed in the 4th quarter ending
  the year at 36,164 closings in all.

Source The Houston MetroStudy
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Housing Projections for 2004

• While the housing market is anticipated to remain
  in good shape, inventory of completed new homes
  is the highest it has been since the mid 1990s.
  
• Thus, builders need to watch inventory levels and
  will likely have to work a little harder for each
  sale as apartment occupancy and rent prices drop,
  and buyers become more difficult to qualify.
• Continued low interest rates are projected,
  keeping the housing boom going for much of 2004.

Source The Houston MetroStudy
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Houstons Apartment Market is Saturated

• While single family housing is growing, the
  Houston apartment market is suffering from
  falling occupancy.
• Occupancy has fallen from 92.3 in September 2001
  to 87.1 as we begin 2004.
• Most of this is attributed to overbuilding, but
  some is a direct result of the impact of low
  interest rates and easy entry into the home buyer
  market.

Source The Houston MetroStudy