Wait and see
A lack of confidence in the economy and job market is keeping some would-be buyers on the fence.
Adam Kassoff recently moved to Houston from southern California for a job in law firm management. He's used to owning, but he ended up renting a two-bedroom apartment in a Museum District high-rise.
While his main motivation to rent was that he's still learning about the city and different neighborhoods, he's not convinced now is the right time to buy even if he were ready. "It's still an uncertain market," he said.
As rental demand expands, more real estate firms are growing their leasing business. Rentals are up 30 percent at Bernstein Realty, a Houston-based real estate brokerage that operates a property management division.
High-end realty firm John Daugherty Realtors just started a leasing division to handle demand, which has been growing since the housing market collapsed nationally.
"Anyone coming from California or Nevada, they couldn't buy because they couldn't sell their homes," said Cheri Fama, executive vice president and chief operating officer of John Daugherty Realtors. "That's how it started."
Caution helps rentals
Apartment-building rentals are also gaining momentum.
As of September, occupancy among Houston-area apartment complexes was 86.4 percent, up from 84.8 percent a year earlier, according to Apartment Data Services. The average rent was $722, up $2 from 2009.
Bruce McClenny, president of the data firm, said more renters are staying in apartments in part because it's gotten harder to qualify for mortgages. "I think everybody is being very cautious and probably rightly so," he said. "That's helping the rental market."