A Closer Look at the Best Neighborhoods in Houston
In a best city report published in 2022, Houston came 42nd. This may sound moderately impressive, given the US has thousands of cities, however, what makes it a truly great achievement was that this report looked at the best cities in the world.
This is not surprising since Houston offers plenty for anyone looking to buy a home or invest in the city. In Houston, there are many incredible neighborhoods where you can find your dream home in a thriving part of the country.
Our experts at Jamie McMartin Group will help break down what you need to know about living in this city, including a look at the real estate market, things you should consider when choosing where to live, and a look at the best neighborhoods in Houston.
Table of Contents
THE REAL ESTATE MARKET IN HOUSTON
Before looking at the best neighborhoods in Houston, let’s provide you with a quick overview of the real estate market.
Houston Real Estate Overview
The Houston housing market remains competitive despite a dip in the latter part of 2022. This trend coincided with Federal Bank raising interest rates to cool the housing market across the US, so it was not only Houston that experienced a correction in real estate prices, this was felt throughout the country.
That being said, the Houston real estate market did not suffer a severe correction and there are signs that the market is already bouncing back. At the height of the housing frenzy in 2022, the median price of a sold home in Houston was $350,000. In January 2023 it had dipped slightly below $300,00. However, in the next month that figure had risen to $315,000.
A homebuyer looking at Houston is in a much better position in 2023 than they were a year ago. Real estate is more affordable and if you invest now, you’re likely buying at a time when you can reap the most benefits from equity growth later. But where should you invest?
BEST NEIGHBORHOODS IN HOUSTON FOR REAL ESTATE INVESTMENT
Houston is big and has many different communities, each distinct with its own charm. Here are some of the best neighborhoods to consider:
The Heights
Where: Harris County
House Prices: Median Home Value $637,000 (Feb 2023)
School Zone: Houston Independent School District
Houston Heights, known as "The Heights," is located in the northwest-central area of Houston. It’s a dense suburban neighborhood with a population of approximately 25,500.
The Heights is one of the most vibrant districts in the area. Featuring gorgeous homes, there is also a wide range of shopping, dining, and recreation options. You can try new cuisines, unwind in its many bars and pubs, and enjoy a raft of local events.
The Market
Many homes in this community may be older, with some even dating as far back as the 1800s. However, they are still intact, and many of them have been renovated and updated with new features. This neighborhood’s unique and beautiful architecture and the area’s rich history are significant attractions for homeowners. Alongside historic homes are several new constructions and modern options.
The Neighbors
Several different age groups are strongly represented in this progressive neighborhood. This has made the area of a great place for art, food, and architecture. Many young professionals live here.
Montrose
Where: Southwest of Downtown Houston
House Prices: Median Home Value $600,000 (Feb 2023)
School Zone: Houston Independent School District
Montrose is a 30-minute bus ride from Downtown Houston. It offers great fun and entertainment with many bars, clubs, and local restaurants serving various cuisines. The neighborhood has fun shops like palm readers, tattoo parlors, antique stores, and vintage clothing spots. The neighborhood is very friendly and welcoming.
The Market
Montrose is a neighborhood that offers an eclectic mix of real estate options. Homes for sale here range from townhomes to 1920s mansions to upscale condominiums. There are also several single-family newly constructed houses designed to fit in with the traditional architecture found in the location.
The Neighbors
The neighborhood has a claim to fame for once being the center for Houston’s LGBTQ community. That energy has left its mark and the area is a melting pot of the well-heeled, young professionals, and those who love living in a creative and vibrant neighborhood.
Midtown
Where: Between Montrose, EaDo, and Downtown
House Prices: Median Home Value $310,000 (Feb 2023)
School Zone: Houston Independent School District
Midtown is a small neighborhood, yet it offers a friendly community with a great nightlife scene. In Midtown, there is something for everyone, whether you enjoy going out to hear live music or simply to just take in the outdoors.
The Market
The homes in Midtown are diverse. There are condominiums and townhouses for sale with one to three bedrooms. Many of these townhomes are in gated communities, with several newly built ones too. The townhouse market has been a significant draw to the neighborhood. You can also find modern patio houses here, replacing the older residences in the area.
The Neighbors
Conveniently located near the Houston METRORail, it’s a preferred neighborhood for young professionals who want ample options for work and play.
Woodlands
Where: 30 miles north of Downtown
House Prices: Median Home Value $554,900 (Feb 2023)
School Zone: Conroe Independent School District, Magnolia Independent School District, Tomball Independent School District
Woodlands is a master-planned community that is home to over 100,000 residents. It’s known for its extensive outdoor recreation opportunities. It’s a place for those who enjoy golf and gorgeous sprawling parks, bike trails, and hiking. The Woodlands offers an excellent combination of suburban luxury and diverse shopping, dining, and activities. Residents also have access to upscale retail and dining at the Woodlands Town Center.
The Woodlands can make a strong claim to being the best neighborhood in Houston as it earned the top spot to live in Niche’s 2022 ratings, coming first out of over 200 other locations. It came 2nd in another category which compared where to buy a home, 2nd in where to raise a family, and placed highly on where to retire.
The Market
The homes in Woodlands are divided into distinct neighborhoods with a wide variety of housing options. There are gated communities, golfing communities, also some beautiful lakefront single-family homes and townhouses.
The Neighbors
There is a wide range of residents that live in the Woodlands. Starter families choose it because of the excellent schools in the area and access to parks and open outdoor spaces. It’s also an affluent neighborhood and has its share of local celebrities and athletes.
Katy
Where: West Houston
House Prices: Median Home Value $340,200 (Feb 2023)
School Zone: Katy Independent School District
Katy is considered an excellent neighborhood because of its affordable housing options and top local amenities. It’s also served by one of the best school districts in the city. Katy offers residents elusive small-town charm, big-city conveniences, and a rich heritage.
The Market
Katy has several large homes on large lots. You can find contemporary houses and new builds in the area’s several planned communities. There are also apartments sporting modern amenities.
The Neighbors
Because of its open spaces and excellent schools, Katy is home to many families with young kids. It’s a 30-minute drive to Houston via the I-10 East, making it a good choice for professionals who want to avoid living in the city.
East End or EaDO
Where: East of Downtown
House Prices: Median Home Value $418,000
School Zone: Houston Independent School District
East End, or EaDo as the locals call it, is a thriving community for those who love sports and the arts. Many of the city’s professional sports teams play here, including the Houston Dynamo soccer team, the NBA Houston Rockets, and the Houston Astros.
The neighborhood has beautiful public murals and gorgeous city skyline views. It has dozens of dining and shopping options and several entertainment venues that host concerts. You can also enjoy craft beers at local breweries.
The Market
EaDo’s real estate market is one of the best in Houston. The neighborhood offers several single-family homes and townhomes. Condominiums are also popular in the area, including several new developments with real estate for every type of homeowner and investor.
The Neighbors
Many sports fans live in this area because the stadiums are all easily accessible to EaDo residents. It’s also connected to the greater Houston area through rail lines and bus routes, making it a good location for young professionals.
FACTORS TO CONSIDER WHEN CHOOSING AMONG THE BEST NEIGHBORHOODS IN HOUSTON
To find the best properties for you, carefully consider these factors. While the neighborhoods we’ve looked at are not primarily geared towards a particular family or lifestyle and have a broad and general appeal, some may be more suited to what you are specifically looking for.
- Property Value and Appreciation Rate
One of the primary considerations when looking at the best neighborhoods in Houston is the area’s property value and appreciation rates. You’ll want to invest in a home or property that will continue to appreciate over time.
In Houston, some of the best neighborhoods continue to enjoy an increase in property and land value even with a slowdown in the real estate market. More often than not, these are also the neighborhoods that have large land lots, are conveniently located next to major job centers and transportation, and provide good community amenities.
In Houston, some of the neighborhoods that have enjoyed good property value appreciation over the past ten years include The Heights, Montrose, EaDo, and River Oaks, to name a few.
- Rental Yields and Vacancy Rates
- Demographic Trends
Houston is generally one of the youngest major cities in the country, with working professionals and start-up families drawn to the area because of the abundance of job opportunities and high quality of life. Younger citizens within the age bracket of 5-17, account for roughly 19.2% of the population. The next most prominent age demographic ranges from 25-35, with the median age being 34.
Understanding the age demographic best suited to your needs can help guide you in finding the best neighborhood for you. The Heights is a great neighborhood for young single citizens, while Midtown is perfect for working professionals. For families with kids, Montrose is an excellent choice. And if you like the outdoors, Woodlands is a beautiful community for you.
- Schools and Local Amenities
Houston has a wide variety of top schools and educational institutions. This makes it relatively easy to find a good place for your family since, wherever you choose, you’re likely to find a good school for the kids.
The area is primarily served by the Houston Independent School District, one of the largest school districts. It has earned many accolades due to its educational programs and aggressive Advanced Placement expansion programs for students.
Excellent neighborhoods for families and schools include Montrose, Katy, and The Heights.
- Future Development Plans
And finally, alongside scouting neighborhoods with good appreciation and rental yields, good demographics, and excellent schools, the last thing you should consider is the future plans of the location.
Houston continues to grow quickly, and innovation is vital to the city’s growth. With Congress approving significant infrastructure legislation support for the city, residents can expect a continuously expanding corporate hub and sizeable investments in infrastructure and technology.
There are also several recreational development plans to look forward to in Houston, including parks, zoo expansions, and more.
Another essential consideration when looking for the best neighborhoods in Houston, especially for investment properties, is to factor in communities with high rental yields and vacancy rates. You want to explore locations with good rental income and a manageable rate of vacancy.
With the current buying slowdown and mortgage rates, Houston’s demand for good rental options has increased. In 2022, over 50% of the households in the metropolitan Houston area were occupied by renters, with an average median rent of approximately $1,750 a month for single-family homes and an approximate rental yield of over 8%.
Some of the best neighborhoods in Houston to have rental properties include Montrose, the Heights, Midtown, and EaDo.
LEARN MORE ABOUT HOUSTON REAL ESTATE WITH JMG
Homebuyers, sellers, and investors interested in the best neighborhoods in Houston will find diverse options based on their different needs. If you are in the market, our team at the Jamie McMartin Group can help guide and provide you with a personalized service geared toward getting the right outcome for you.
With over a decade of experience in the Houston real estate market, we are confident we can provide you with all the information you need to find your ideal property. Our team has been consistently recognized by the Houston Association of Realtors (HAR) and the Houston Business Journal (HBJ) for our impeccable work and service.
Let’s find your home today!
Let us help you find your home in this city. Give us a call at 281.961.5161 and connect with some of the best agents specializing in the best neighborhoods in Houston. You can also send an email and we’ll get right back to you.