Just when we thought things couldn’t get any crazier, the markets once again proved us completely wrong. How exciting (both negative and positive) has this week been?!
Monday, April 20 was the most tumultuous day in oil and gas history. Ever. Short term crude oil prices literally went negative.
Being in the energy capital of the world, Houstonians tend to be pretty interested in oil prices. Even if you’re not directly involved in the industry, you’re 100% in it if investing in real estate in the greater Houston area. And boy was this day interesting. I personally started receiving text messages, emails, and phone calls from friends and family at about 10am, and it continued all day.
“Oil is at $11!”
“OMG, oil down below $5”
“WTF is happening to oil”
“Oil now negative”
“Oil now very negative”
“Oil now impossibly negative”
“Who has a large swimming pool we can fill with oil?”
And so on.
At the time of writing this, oil prices have rebounded to above $15…that’s a positive $15. And markets in aggregate have continued to improve, even though there were over 4 million new jobless claims announced, bringing the total in the last 5 weeks to over 26 million.
And though no real positive news came out, our property management firm and the industry overall experienced a small comeback. The number of internet views of our properties listed for sale and lease doubled week over week. Not counting the last 7 days, we only had 2 applications for listed houses in the past month. Over the last 7 days, we had 6 applications! The monthly rent for those houses ranges from about $1,000 – $5,500, so it was certainly not just for lower priced rentals.
CNBC came out with an article discussing how US overall demand rebounded week over week as well – https://www.cnbc.com/2020/04/23/coronavirus-housing-demand-may-be-bouncing-back.html
I will hope for the best for our housing market, but I’m not ready to assume this bounce back is sustainable quite yet. But it is a good sign. People are, at least at this snapshot of time, actively looking for housing more than they have been recently. As current or potential property investors, following this trend will be important as you evaluate what is best for your portfolio.
On a related side note, be on the lookout in the coming week for a series of short podcasts from my conversation with AAM’s broker Dr. David Schein and business development manager Sharon Strickland. We discuss more about housing trends, oil prices, and thoughts on the future. It was a great conversation that I’m excited to share. Until next time, take care and be safe.
Charlie Roseland
President
