In this issue:
- June sales and lease data released by HAR
- Should I buy right now?
- Office doors locked again and new videos coming soon
Just when we thought we were getting out of the woods, the reality of COVID-19 has pulled us back in. The greater Houston area is statistically the worst it has been since the beginning of the pandemic. Whereas a month ago we were opening the local economy more and generally feeling better about the path forward, we now have many companies voluntarily closing doors and a statewide face covering mandate. We have returned to locking the office during the day due to this situation, I’ll get into that more below. But first, the data.
June HAR Data
HAR’s monthly data release for June (https://www.har.com/content/newsroom?pid=1728) is titled “Houston Home Buyers Pump Up the Volume in June.” Sounds encouraging! And the data generally was. However, there was a caveat at the beginning of the article saying it might only be a brief respite due to the recent surges in cases and hospitalizations.
To be fair, June’s data was mostly positive. Year over year sales numbers increased in almost every price category, and the number of single family home leases increased 15.3% year over year. Rent for single family homes did decrease by 1.0% overall, but not bad considering our economic circumstances.
Our property management company largely echoed this data. The middle of May through the middle of June felt almost normal again. Showings were up, leases were up, and optimism was high. But things changed towards the end of the month. We are still seeing more activity than April and early May, but it doesn’t feel like early June.
Should I buy right now?
If you have the means to invest in more real estate, you’re probably thinking of great deals that could exist right now. And there very well are some. But I have two important things I want you to consider:
1. Lack of supply in Houston is outweighing the decrease in demand. Yes, lower demand should mean lower prices. However, you have to remember the other side of the economic equation. There just aren’t as many listings coming to market right now. And with the pickup we saw in June sales, inventory in Houston is actually decreasing. We are now at a 3.2 months supply vs 4.3 months a year ago and vs the current national average of 4.8 months. This low of inventory combined with historically low interest rates won’t help bargain hunting.
2. The current moratorium on government backed mortgage foreclosures runs out July 25. I say “current” here because there is a ton of state and national level debate about expanding this. Texas does not have a separate ruling and is following the CARES Act, which does not allow Fannie, Freddie, VA, or other government backed mortgage holders to process foreclosures. Until July 25. If this stands, I guarantee there will be a flood of foreclosures coming to market, likely in the last quarter of this year. August and September are probably too soon to see much, and it will take courts some time to process and get these on the docket. But it will happen at some point, too many banks have gone without mortgage payment for 3+ months now.
Our office is open, but doors are locked.
Due to the almost daily record breaking number of cases, we have locked our doors during the day. We are open, but you must have a mask on to enter the building. We do have a dropbox on our front door for tenants to drop off rent or if owners need to drop something off for us, but we ask that you help us do as much digital as possible.
We will have a series of short video recordings coming out again soon as well. My colleagues and I will touch on some of the topics here and others. I look forward to your thoughts and am happy to get specific questions on the agenda for future recordings. Just let me know!