I think he's staying in Houston. Money won't be an issue for him and playing next to a good friend won't be a problem either in Houston considering he was Dwight Howard's best man at his wedding. I think Smith wants to be part of something special in Houston, not be on something potentially chaotic in Sactown. Amongst all his downsides, Smoove made Houston better last season.
Even if it's still not enough to put the Rockets over the top, it does make them better. I'm surprised he hasn't had a bigger market after his performance in this years playoffs.