Houston ended 2020 on a high note, seeing positive absorption for the first time in two quarters. 74% of Q4 deliveries were leased by the end of the quarter and were the main contributor to positive absorption.
More than half of the jobs Houston lost since April have come back, with November unemployment at 8.9%, showing a much faster pace of recovery than previous downturns. Transportation, warehousing, retail, leisure and hospitality, and government have seen the most increases, while mining is still down 15% from this Spring.
The most important stimulus tool is the vaccines that are now being deployed. They will not prevent a difficult winter but should allow for some normalization of activity by mid-Q2 2021.
Presently, we anticipate GDP growth nearing 5% in 2021 with upside risk. The outlook will be uneven across sectors with the travel and hospitality industry likely to operate below potential for some time whilst technology and goods-production should see a quicker path to recovery.