I was driving in to work this morning and on the radio there was a story that said that Houston’s housing inventory has dropped to its lowest level in thirteen years. This is creating a problem for the region’s growing workforce. The reason for this drop in inventory is “the economy.” Houston has added nearly 85,000 jobs last year, and you know that Houston didn’t just absorb all those jobs, many of the people who filled those jobs were people that moved her from…well from where you are.
But Shad Bogany, chair of the Texas Association of Realtors, says many of those workers are having an increasingly difficult time finding a house they can afford.
“They’re just not building in that entry level market right now, and really on new home sales, they don’t have enough inventory to handle all the relocation, buyers coming in. And as I talk to builders around the city, they are just scrapping for inventory, and they’re trying to build up. But then, you’ve got the banks, on the other hand, is not loaning money like they were, for them to be able to start meeting the demand.”
Houston’s home inventory shrunk to 3.7 months in December, the lowest level since December 1999.
One thing that was not mentioned in the radio news story is that this has caused one of the best environments to raise rent in the last 10 years. The Houston Business Journal ran a story recently that indicated that although residential rental rates nation wide have increased on average 4.7% in Houston rents have increased 11.2% in 2012.
I know you guys get sick of me saying it but you need to get your butts to Houston the business environment and economy is great. You can also play golf without a jacket in January.
Bluemoon,
Great to get an outstanding economic snapshot from Houston!
Half of our current tenants are now Texans, here on short-term work assignments. Let’s hope the Houston wind continues blowing next door here to New Mexico.
allagash,
All are pretty much oil refinery workers–welders, pipe fitters, crane operators, etc. Our nearby oil patch refinery is undergoing annual renovation. We don’t have enough local workers to handle that. They brought in 1,000 I heard.
West Texas is booming as well because of all the oil industry jobs. A couple of my buddies do a lot of mortgage business in Odessa/Midland and they say that their prequalified buyers take forever to get executed contracts due to multiple offers.
Indeed. Man about 4-5 years ago you could get a 3000 sf house in Houston or the surrounding areas for way below market value. I mean good looking inside and out. Now, the market is turning but there are still super good deals out there to be had, just takes a little creativity.
That is exactly what I mean. Houston has a lot of jobs. Come down and get you one. Then you buy this house http://search.har.com/engine/15107-Ripplewind-Ln-Houston-TX-77068_HAR32400142.htm
It is for sale for $233k. Offer them $210. You are in this house for 10% down and a note of $1300/month or so. Then buy 5 rent houses like this one. http://search.har.com/engine/1426-Plumwood-Dr-Houston-TX-77014_HAR98741242.htm which I found in 5 minutes. It is for sale at $65k. After you fix it up your will have a note around $650/month. This house rents for $1200/month and will rent within a week. This house has a cash flow of around $500/month. I found this house in about 5 minutes. I have not checked it out but Houston is full of these kind of deals. Your rent houses now pay for your house and all the money from your job goes to your pocket. That is what Houston will do for you. It is the lifestyle you can live. Don’t think about renting out houses think about sitting around the pool in your backyard. The beauty of Houston is that a really nice lifestyle is really attattainable for normal people who want to do real estate.
Numbers like that make REI a whole lot easier. That’s a really good deal on the bigger house too. That is the reason I don’t spend any money marketing to buy properties. I can find them right on the MLS already at a decent price. I’m very thankful I don’t need a marketing campaign. For anyone looking to get into rentals, you need to find places that have numbers like that Plumwood Dr property. Your chance of success (and positive cash flow) will be pretty good on a property like that.