Houston Takes the Top Spot for Residential Real Estate Investors
Houston Takes the Top Spot
Real estate investing – whether fixing and flipping or acquiring to hold and rent, is alive and well in Houston, Texas. Despite the twelve month decline in oil prices, the Houston economy and the real estate market in particular are doing very well due to a robust and diversified local economy. According to Local Market Monitor, a national real estate forecasting firm, Houston is the number one residential real estate investment market in the nation, followed by Austin and Dallas.
Pent up demand, a growing economy, an influx of new residents (according to the census bureau, Houston was the second fastest growing city in the U.S. between 2013 -2014) and low unemployment are some of the major drivers of Houston’s strong demand.
Strong April Statistics
According to the Houston Association of Realtors, Houston home sales in April rose 1.9% over the same period last year despite the decrease in the price of a barrel of oil from a year ago of $108 compared to today’s price of $57.00 (a 47% price decrease) with the total volume of sales equaling 6,502 units, a strong testament to the strength and diversity of the local economy. The average price climbed 4.3% to $281,724 and the median price jumped 7.0% to $209,790.
Months of inventory saw an increase to 2.9 versus 2.6 last April. While up 0.3 months, it compares favorably to the national average of a 4.6 months. Houston Association of Realtors Chair Nancy Furst was recently quoted as saying that “the Houston real estate market is doing quite well despite low inventory levels and concerns about the effects of declining oil prices”. Her biggest concern is seeing how layoffs in the energy industry will affect homes sales in the months ahead.
The strength of the Houston residential real estate market is further evidenced by the decrease in April in the number of days it took to sell a home which decreased to 51 days from 56 days a year earlier. Existing single family home purchases which are the focus of most investors totaled 5,571, up 2.6% from the same time last year with average prices up 4.9% to $262,967 and median prices up 7.8% to $194,000.
Demand for rental properties was flat during April, however, the average rental rate for a single-family house rose 5.9% to $1,764 per month.
Local Investors Market
Most local investors continue to focus their buying efforts on older assets in well-located neighborhoods that need a facelift. Interestingly, many are purchased through wholesalers and then either sold directly by the owner, through a local realtor or held for rental and cash flow purposes. Additionally, many run into financing issues when they reach their Fannie Mae limit or hit a Debt to Income Ratio limit. Since the opening of Houston-based, Corevest Finance office in March, there has been a tremendous amount of investor interest in the Corevest term loan product that can be used to recapitalize a real estate investor’s portfolio without any limitation on the number of assets being financed. Additionally, Corevest’s ease of use acquisition line of credit product has also been well received.
For more information about how CoreVest can help grow your rental and rehab business, please call 844.223.2231 or submit our contact form.
Disclaimer:
The views expressed herein are the opinions of CoreVest personnel. CoreVest makes no representation or warranty, express or implied, as to the accuracy or completeness of any of the information in this presentation. The views expressed may be based on market data or research provided by third-parties. CoreVest has not independently verified any of the information set forth in this presentation.
Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. CoreVest assumes no obligation to update or otherwise revise any of the information herein (even if such information is no longer accurate or complete or if experience or future changes make it clear that any projected results expressed or implied will not be realized).
Nothing contained in this presentation is, or should be relied upon as, a promise or representation as to the future performance of the real estate markets referred to herein. In all cases, readers should conduct their own independent investigation and analysis of the information contained in this presentation.