Houston trends concerning rentals SFR

[Mike Landry]

Curious to what others think about this market as it relates to SFR rentals. I've bolded my concerns. Basically sales prices are going up while inventory is increasing and rent is decreasing. Property taxes are going up without the ability to pass the cost on to renters. While the sale side of the market appears healthy it makes me question the long term trends and where we are in the cycle. On top of that interest rates have increased and added pressure on new rental purchases. My own numbers are telling me that I have to purchase a house at %70 ARV to even consider it for a rental. But then I ask myself why make $200 - $300 per month(net all costs) when I could make $20,000 to $30,000 just flipping it instead.

What are you guys seeing in your local areas: sugarland, Conroe, katy, clear lake, kingwood, willis, Houston, spring and surrounding areas. 

May 2017

Single-family home sales rose 11.5 percent year-over-year with 8,156 units sold;

Total property sales increased 12.3 percent with 9,744 units sold;

Total dollar volume jumped 17.4 percent to $2.8 billion;

The single-family home median price rose 4.4 percent to a record high of $235,000;

The single-family home average price climbed 4.3 percent to $302,362, which was the second highest level of all time (highest was $302,629 in June 2015);

Single-family homes months of inventory grew to a 4.1-months supply, the highest level since November 2012;

Townhome/condominium sales surged 16.5 percent, with the average price up 3.1 percent to $206,363 and the median price up 0.9 percent to $163,500;

Leases of single-family homes soared 31.0 percent with average rent down 4.2 percent to $1,779;

Volume of townhome/condominium leases rocketed 46.2 percent with average rent down 6.7 percent to $1,565.

[Mike Landry]

FYI. Here are the June stats for Houston. YoY metrics are mostly up but at a lesser rate than previous month.  Supply is at the highest level since 2012 and rents are down 4% for single family's.  I'm going to update this post every few months to keep up with the macro picture.

• Single-family home sales rose 8.3 percent year-over-year with 8,414 units sold – the largest one-month sales volume of all time;
• Total property sales increased 8.3 percent with 9,993 units sold;
• Total dollar volume jumped 10.4 percent to $2.9 billion;
• The single-family home median price rose 2.6 percent to a record high of $239,023;
• The single-family home average price increased 1.5 percent to $304,155, which was also a record high;
• Single-family homes months of inventory grew to a 4.4-months supply, the highest level since October 2012;
• Townhome/condominium sales edged up 1.2 percent, with the average price up 7.6 percent to $215,713 and the median price up 3.6 percent to $171,000;
• Leases of single-family homes jumped 17.4 percent with average rent down 4.0 percent to $1,806;
• Volume of townhome/condominium leases rocketed 21.3 percent with average rent up 2.5 percent to $1,698.