Property Management Updates from the Front Lines – June 12, 2020

Here we are in mid-June, and the Houston area feels like July weather-wise and a semblance of May lease-wise.  The economy has opened up substantially since the beginning of May, but unfortunately new data has come out showing we are by no means past the peak of COVID-19.  The new spikes in hospitalizations are certainly concerning, so we are watching this closely.  Our office has largely returned to normal in June, albeit with precautions such as weekly disinfecting of the entire office and daily disinfecting of doors and light switches.  I will let our clients and residents know if we do have to return to locking the office during business hours, hopefully won’t be the case.

This week HAR released their monthly sales and lease data for the greater Houston area in May.  See the full article here: https://www.har.com/content/newsroom?pid=1724.  Unsurprisingly, sales in aggregate were down over 20% year over year.  Houses listed at prices above $750,000 were by far the hardest hit, seeing more than a 56% decline in closed sales.  Average sales price for single family homes overall fell 7.4%; the first year over year decline since January 2018!

Leases showed an interesting bright spot, however.  Single family home leases were actually up 11.9%, but townhome/condo leases were down 4.6%.  Average rent price also decreased 2.8% and 4.6%, respectively.

Overall pricing is being hit but far less so than the number of sales and leases.  Many folks are still hesitant to list their houses for sale or lease due to economic concerns and contagion concerns.

At our property management company, we are continuing to see an increase in lease activity.  This is the typical busy season for real estate, it’s not shocking that we’ve had more leases in May and June than March or April.   But May was still significantly slower this year than 2019 in terms of number of physical showings and online views at listed properties.  June, however, has started to feel like May and June of last year.  We are receiving what I’d consider a normal level of showings, online views, and inquiries.

This has just happened in the last couple weeks, but it’s an encouraging sign.  It’s yet to be determined if this trend will continue or if it’s just a blip consisting of the tenants that absolutely have to move due to work or familial changes.

You might have seen past information about an insurance program called Rent Rescue that would help pay for lost rent revenue if someone moved out of a rental property prior to the lease end date.  In the current environment, that company has understandably paused the program.  If you were already enrolled, you are still good.  But no new applications are being accepted.  We will let you know once that returns.

Last week on June 5, I sat down with our company broker and attorney David Schein and business development manager Sharon Strickland to discuss current market trends.  The first 2 videos are now up: https://themanagementpros.com/videoblogs/.  Each is about 4 minutes.  We’ll release a couple more videos next week as well, so be on the lookout!

Thanks as always for your time and interest.  Let me know if you have any specific property investment questions during these crazy times, I’d be happy to discuss on future updates and videos!