What’s NOT in the Houston Rental Market Update
The Houston Association of REALTORS® October Rental Market Update that covers October is out and the subtitle says exactly what you would expect, “Rising mortgage rates continue to drive would-be homebuyers to rent.”
The year-over-year highlights for single-family rental activity include:
- 19.2% increase in signed leases
- 4.3% increase in in average lease price, to $2,181 per month
- 6-days increase in days on market
The increase in the days on market is likely due to 39.2% more new single family rental listings than the same month last year. And remember, signed leases are up, but only by 19.2%.
Here’s what’s NOT in the report:
While new listings are up 39%, total Active listings are up much higher than that, 89%. Intuitively, with this much more inventory you’d probably expect that Lifestyles Realty, Inc. clients are experiencing higher vacancy rates and longer turn-overs due to prospective tenants having so many more options.
Here’s why the reality is counter intuitive.
Our clients are seeking to serve hard working, middle-class Texans by providing rental properties they can afford and love to call home. The median annual household income in Harris County, TX is about $63,000, or about $5,200 per month. The US Department of HUD says that housing costs that exceed 30% of gross income are considered unaffordable. This means that half of Harris County households can’t afford rent above $1,575. This is a far cry from the average lease price for single family homes at $2,181 monthly.
If you run the Active listings report on just single-family rental homes that are listed for $1,575 and under, the result is staggering. Only 12% of the Active single-family rental listings would be affordable to the median income households in Harris County.
Our clients are investing in properties that are in high rental demand, and low rental supply. If they’re priced correctly, and everything about the property is in good condition, then vacancy, if any, should be negligible. As soon as one of these hits the market there will be so many folks interested in applying the owner better know how to screen effectively. More on that later.
In the meantime, if you are interested in adding properties like these to your real estate portfolio then make sure you get a good mentor. If you already have a Lifestyles mentor, then contact a Lifestyles Realty, Inc. REALTOR® right now by clicking on the “Our Team” link at the top of this page.
Sources:
https://www.census.gov/quickfacts/harriscountytexas
https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html
Contributing author:
Jeff Smith
Multifamily REALTOR® / Single Family Sales Manager
office – 713.782.0018 x1115
direct – 713.554.2247
jeff.smith@luinc.com
