Houston in Recession? Graphs! Appreciation plummets. Austin good

[J. Martin]

Is anyone changing strategy in Houston? Still buying? Waiting until unemployment peaks, then starts improving, to get the biggest gains..?

- The unemployment rate is shooting up in Houston. Looks similar to the last 3 marked recessions. 
- Home price appreciation plummeted.
- Austin is kicking Houston's ***. (full details in link in signature)

And home price appreciation followed, decelerating dramatically from double digits to low single digits and dropping..

Compare that to the trajectory of the unemployment rate in Austin (given, different cash flow calc here..)

But look at the stark contrast between the appreciation rate in Austin vs Houston, and the trajectory of those changes in prices..

Personally, I'd rather be buying after unemployment has hit its worst, then starts improving.. but that's just me..

What do you think about the correlation here..? Good time to jump in..?

[Jesse Mao]

Excellent analysis. There are so many terminated/expired/withdraw listings in Woodland, Katy and West Houston (Energy corridor) in the past 6 months. These are usually priced $300K and up. Katy alone have 10 times SFH rentals compared to same period 2 years ago. Sellers are not willing to lower prices. Instead they keep live there without job, let house sit vacant or try to turn those houses into rentals. That crashed rental rate in areas like Katy. In addition, there are many brand new Class-A apartments just come to market. The difference between this downturn and last one is this time people who got laid off are usually those who had good jobs and large savings. Many of those large houses are already paid off. People who are able to hold off won't sell cheap. From investors' perspective, the exit strategy on those 3000 to 5000 sqft houses are limited. The houses don't cash flow well and in most cases there are very few buyers if investors try to flip these houses.