Houston Housing Stats February 2017

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http://www.har.com/content/newsroom

Highlights:

  • Single-family home sales rose 4.0 percent with 4,933 units sold, the second monthly gain of 2017;
  • Total property sales increased 7.1 percent with 6,111 units sold;
  • Total dollar volume jumped 13.1 percent to $1.6 billion;
  • At $220,000, the single-family home median price rose 7.3 percent to a February high;
  • The single-family home average price climbed 6.7 percent to $280,175, which was also the highest level for a February;
  • Single-family homes months of inventory edged up to a 3.5-months supply;
  • Townhome/condominium sales shot up 17.1 percent, with the average price up 0.8 percent to $204,397 and the median price up 8.0 percent to $162,000;
  • Leases of single-family homes rose 8.5 percent with average rent down 2.1 percent to $1,652;
  • Volume of townhome/condominium leases was unchanged with average rent down 3.5 percent to $1,478.

News like this is making it even more difficult for a new, and ready to spend, investor trying to get into real estate investing. It seems my thought process changes from post to post and that is an obvious sign that I don't know enough about real estate but at the same time I am trying to learn and not to get stuck in "Analysis Paralysis". I moved to Houston less than a year ago and paid $360K for my new construction house and now other houses of comparable specs within my community are priced for $500K and I can't believe it. The house right across from mine is a few hundred square feet smaller and it sold for over $400K and that was purchased about 6 months after I moved in. People are buying homes it seems regardless of price, I met a new couple who were in their 20s and they don't have any kids but they are getting a new house constructed that is almost 5000sf! I have 4 kids and I felt like I was overspending so I have no idea how people think or am I the screwed up one???

I grew up in New York and worked in Manhattan most of my career for a fortune 50 company that maintained building systems and my accounts were in the financial district (American Express, Merrill Lynch, Chase, Goldman Sachs, Deutsche Bank, Bank of NY, AIG Building) and I got to see first hand what 2007/08 did to people and that still scares me. I remember being told by the property managers of these buildings not wear my building security tag if walking downtown because people may attack me thinking I am a stock broker working for one of these banks.

I keep asking myself would it be better to buy a property and not leverage it so my cash flow would be higher but it would be the most secure way invest in the event there is a correction. If I don't use leverage then my portfolio would grow slowly but it would also grow organically but is that any way to build wealth? All I know right now for sure is that I don't understand real estate and that I need to invest more time without getting stuck in study mode for the rest of my life.

What are your thoughts?

Love the naysayers. Been here since 1990. You should have seen the place then. Entire streets with nothing but foreclosures on them. We are never going back there. Any idea why TX and Houston did so well in the last downturn? Diversity. We have done nothing but diversify this economy and population for the last 25 years. Made huge tax incentives for industries to move in here and create jobs.

And then there is O&G. We just went through (I think we hit bottom, and have made the turn) the worst downturn in my lifetime (adjusted for inflation) and now look what just happened. Exxon Mobil just announced another $20B in spending for the Gulf Coast!

Jobs, Jobs, Jobs!

Worst O&G in a lifetime and Houston is still adding jobs for the last 3 years. Check the Greater Houston Partnership if you don't believe me.

Invest in TX and invest in Houston.

@Brian Foster Also helpful insight. Like they say, you can make money in an up or down economy, it's simply a matter of choosing your deals correctly. Baker Hughes is back onto hiring as well as a lot of activity out at the Permean Basin. Yes, it is good to make sure that as investors we don't ride the price wave, but that doesn't mean we shouldn't invest either. I'm looking forward to getting roots down in Houston very soon.

@Brian Foster : I am completely with you on all your points. Except that, being cautious and saying nay are completely different things; in fact I myself am actively investing in Houston. My philosophy is to invest in both the upside and downside. But, didn't want a newbie to look at those numbers and throw all his money in.