Texas Real Estate Is Finding Its Balance
Economic growth, moderating supply and resilient demand are shaping the Texas market through 2027.
Good morning. Texas real estate is entering 2027 with steady economic growth, easing supply pressures and resilient demand across major property sectors. Industrial and retail are showing healthier fundamentals, while multifamily and office continue to work through their respective challenges.
🎙️ This Week on No Cap: Basis Industrial's president explains why small bay's diversified, deeply invested tenant base makes it the safest bet in commercial real estate right now.
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Market Snapshot
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Market Balance
Texas Real Estate Forecast: A Measured Recovery Through Summer 2027
Texas real estate is heading into 2027 with steady economic growth, moderating supply pressures and a market that looks increasingly balanced.
Economic outlook: TRERC expects Texas GDP to grow 2.4% to 2.8% through summer 2027, ahead of the U.S. forecast of 2% to 2.5%. Employment is projected to increase 1.1% to 1.7%, while population growth of 1.1% to 1.5% should continue supporting real estate demand. Still, borrowing costs will remain elevated, with 30-year mortgage rates forecast at 6% to 7%.
Single-family housing: Home sales are expected to remain resilient, reaching approximately 354,000 in 2027, up 2.5%. New-home permits should hold near 149,000, while the median price is forecast to rise 1.8% to $341,000. Single-family rents should remain around $2,200.
Multifamily: After roughly 93,000 apartment deliveries over the prior 12 months, new supply is expected to fall to about 40,000 units. That should improve market balance, although concessions will keep rent growth soft for new properties. Stabilized assets should see flat to slightly positive rents.
Office: The Texas office recovery remains concentrated in premium properties. Less than 5 million square feet of new space is expected through summer 2027, while absorption could reach 4 million square feet. Class A+ properties should lead rent growth, with DFW expected to perform best, while older properties face a more mixed outlook.
Industrial: Texas industrial demand is beginning to catch up with its rapid supply growth. More than 50 million square feet is expected to be delivered over the next year, while absorption could approach 15 million square feet per quarter by summer 2027. DFW and San Antonio are expected to lead rent growth as the market becomes better balanced.
Retail & rural land: Retail supply and demand should remain closely aligned, with roughly 13 million square feet of both new deliveries and absorption through summer 2027. Rents should continue rising, led by Dallas and San Antonio. Meanwhile, rural land is cooling after a 6.6% price increase in 2025, with sales near a decade low and prices expected to remain broadly flat through 2027.
Policy watch: Tariffs, interest rates, property taxes, insurance costs and potential restrictions on institutional home purchases remain important risks. Opportunity Zone 2.0, launching in January 2027, could also create new investment opportunities in qualifying communities.
➥ THE TAKEAWAY
A Market Finding Its Balance: Texas isn't headed for a boom—or a bust. Industrial and retail are moving toward healthier supply-demand conditions, premium office assets are showing early signs of recovery, and multifamily is working through its supply wave. With population and employment still growing, Texas continues to benefit from a durable underlying demand base.
Around Texas
➥ Dallas apartment performance remains subdued as slowing job growth compounds elevated supply, with rents rising just 0.5% in Q2 2026 despite stronger Class A performance.
➥ DFW is emerging as a biotech growth hub, with rising job postings, expanding lab and manufacturing space, local capital, and research partnerships helping startups scale.
➥ SpaceX is suing Texas Attorney General Ken Paxton and Grimes County to block the release of confidential records tied to tax incentives and negotiations for its planned $16.8B Terafab project.
➥ CBRE senior vice president Chris Deuillet, 56, died Sept. 6 after nearly two decades with the firm, leaving a legacy of more than $3B in Dallas multifamily transactions and deep professional relationships.
➥ Holt Lunsford acquired 14.4 acres in Northwest Houston to develop a 191,768-SF Class-A industrial facility, targeting mid-2027 delivery amid tight 6.2% submarket vacancy.
➥ Plano ranks No. 1 among 345 U.S. cities for uncluttered living, combining spacious homes, affordability, short commutes, safety, healthcare access and abundant parks.
➥ White Rose Partners withdrew its proposed $500M, 225,000-SF data center in Prosper after resident and official opposition over power, water, noise and proximity concerns.
Follow the Money
| OFFICEDALLAS Shorenstein acquired the 300K-SF Sherry Lane Place in Preston Center, betting on Dallas’ high-demand, amenity-rich office market while expanding its DFW portfolio. |
| HOSPITALITYHOUSTON Houston-based Westmont Hospitality will acquire Evergrande’s bankrupt Fairmont Le Château Montebello in Canada, with court approval and closing expected Nov. 15. |
| INDUSTRIALLAREDO Taurus Investment Holdings acquired the fully leased, 412,871-SF Crossroads Business Park in Laredo, strengthening its presence in a key U.S.-Mexico trade corridor. |
| OFFICEHOUSTON Mitsubishi will invest $26M to renovate 92,000 SF across four floors at Houston’s Enterprise Plaza, relocating its operations downtown by 2027. |
| MULTIFAMILYIRVING RPM Living, Baltisse and Peruna acquired the 374-unit Louis Las Colinas in Irving, backed by $62.3M in financing and a value-add renovation plan. |
| RETAILSOUTHLAKE Trademark Property and Harrison Street secured $77M to develop Southlake’s Whole Foods-anchored Shivers Farm, featuring 161K SF of retail and office space. |
| MULTIFAMILYTERRELL Dominium is developing 350 affordable build-to-rent townhomes in Terrell, backed by $58.2M in construction financing and targeting households earning up to 60% of area median income. |
📈 CHART OF THE WEEK
Houston is emerging as a major data center growth market, leveraging Texas' abundant power resources, low electricity costs and growing demand for artificial intelligence and cloud computing infrastructure.
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