Real Estate Agent · Houston, TX · Member since 2016 · 79 posts · 69 votes
Single-family home sales fell 19.1 percent year-over-year, with 6,199 units sold, ending nine consecutive months of positive sales;
The Days on Market (DOM) figure for single-family homes was unchanged at 58 days;
Total property sales dropped 21.6 percent, with 7,192 units sold;
Total dollar volume dove 20.4 percent to $2.14 billion;
The single-family home median price rose 2.4 percent to $251,000, reaching an April high;
The single-family home average price was flat at $310,331;
Single-family homes months of inventory was at a 3.6-months supply, down from 3.9 months last April but above the national inventory level of 3.4 months;
Townhome/condominium sales plunged 37.5 percent, with the average price up 11.9 percent to $227,577 and the median price up 12.2 percent to $181,750;
Lease properties staged a negative performance, as single-family home rentals fell 4.1 percent with the average rent down 1.7 percent to $1,765; Volume of townhome/condominium leases fell 9.5 percent with the average rent down 1.2 percent to $1,565.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
6y
Prices are up and the number of months supply is down? Doesn’t sound like the city or the homeowners are taking any sting. They’re taking a victory lap. Maybe change the title to Houston realtors feel the covid sting with lower sales?
I do love the negative spin on a 11% yoy price increase fro condos and townhomes. Even a few percent for houses and a new April Price record isn’t even good enough to celebrate.
Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
6y
@Jhoana Olarte thanks for the statistics! What does it all mean though? Prices seem fairly stable. Total sales dropped, but I'd say that reflects more that people are deciding not to sell right now, as opposed to no interest to buy. Therefore the sales prices are stable.
Without knowing statistics, in St. Louis I'm seeing less inventory and stable or even increased pricing. I'm not staring at the market each day; I revisit it every couple of days since I'm vaguely interested in buying something.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
6y
Prices are up and the number of months supply is down? Doesn’t sound like the city or the homeowners are taking any sting. They’re taking a victory lap. Maybe change the title to Houston realtors feel the covid sting with lower sales?
I do love the negative spin on a 11% yoy price increase fro condos and townhomes. Even a few percent for houses and a new April Price record isn’t even good enough to celebrate.
Real Estate Agent · Houston, TX · Member since 2016 · 79 posts · 69 votes
6y
Michael - I believe most of us had thought COVID would have a negative impact on house sales and in some ways it did, just not the way we thought. We initially had thought there would be fewer buyers on the market which would result in pressure on prices, however, there´s also been a significant decrease in the supply of homes available for sale, which has stabilized prices.
Investor · Katy, TX · Member since 2013 · 47 posts · 33 votes
6y
For someone being laid off, the first reaction is not to sell the house. He will search for a new job for months on. After he exhausts all the funds including government benefits and savings, or he finds some job in another city, the reality will kick in that he will have to sell. The effect is lagging. In 6 to 12 months, it will play out.
Houston, TX · Member since 2019 · 24 posts · 4 votes
6y
I feel like the stats of this path month is not proof of anything.The real question is what happens after millions get laid off? While it is impossible to predict what the future has in store. I'm curious to see articles and stats from the "experts" regarding the future. Although small businesses opening is a nice start. I don't think its realistic to assume we are getting right back to business... but I'd love to hear your perspectives
For someone being laid off, the first reaction is not to sell the house. He will search for a new job for months on. After he exhausts all the funds including government benefits and savings, or he finds some job in another city, the reality will kick in that he will have to sell. The effect is lagging. In 6 to 12 months, it will play out.
Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
6y
@Jhoana Olarte Thanks for the market update. I know you do that religiously every month.
My thought as Broker, Investor and market analyzer, Houston RE market, we are in the eye of the Hurricane yet. Its coming, coming slowly because of lots of things,
1. Fed loan program is holding many big companies layoff till October. Like United cannot layoff employees till October while they got millions of relief. They plan to layoff 30%
2. Oil and gas companies are starting to do cost cutting and layoffs coming in Jul- Sep so thousands will be affected.
3. Retail business are using EDIL for now and when we get 2nd wave in fall which is expected and they run out money, more impact.
4. Sellers are holding off because they think people will expect ridiculous price lowering so trying avoid but its going to get worse which they are predicting.
5. Finally, i do expect market slowdown and foreclosure which always lags due to process timeline but it wont be similar to 2008 which happened because finance market.
I would like to say, investors keep looking and buying and also keep money to jump in later for grear deals which might popup later this year or next year.
Anyway, recession is here and here to stsy for few years. Tighten your belt and get ready for a ride.
Thank you for your posts and opinions. What are everyone's thoughts on mortgage lending and trends?
I purchased a rental, single family home with cash in late April and am finalizing a cash-out refi now. While home mortgages are at or below 3% the best I found for an investment property was 5% with 3.2 discount points (quiet expensive) for a 75% LTV loan. I also experienced one lender backing out of the investment loan space after making an initial offering while Covid19 news worsened.
Do you see mortgage suppliers withdrawing or becoming more restrictive and is that having a large impact on real estate demand? If so, people will need take extra precautions when going into a BRRRR strategy and ensuring the refinance leg of the plan is possible.
Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
6y
@Scott Byer That's really good question. Actually I am dealing with the problem already for last 2 months. It's taking more than ever to get my refinance done and it's take 2-4 weeks to just get underwriter to look at the file. I also hear from my wife who is loan offer and other lenders I use that refinance is given importance much than purchase. They take their sweet time to process it.
Also Cash out refinance has been stopped by many lenders. Even regular regular refinance, you have to pay points and many lenders are forcing you to pay points and they don't offer without points as my lender. So it's going to be hard and time consuming to get your refinance done at this current situation so plan accordingly.
Many lenders are not even willing to take the investor refinance loans and increased credit score requirements as well and JUMBO loans are totally stopped as well.
It's totally different situation than ever so BRRRR strategy investors make sure you plan accordingly
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Jhoana Olarte Looks like that Houston faired pretty well in April. I agree I think the fallout is Q3/Q4/Q1.
As far as lending, I think the deep value adds are risky right now. I know lenders who are still lending on conventional cash-out refinances and will continue to do so with low-risk projects. So those with conventional spots open, they are sitting very well to continue to buy. For those needing commercial terms, they will need to get creative with a local bank that carries their own notes or other JV structures until servicing resumes. This is a great time to be cash-heavy right now so you can float your own projects, or lend on others.
And if you need cash, there are private lenders right now (partnerships are key!). Keep in mind, many are able to pull up to $200K out of their 401Ks as a loan (up to $100K) and withdrawal (up to another $100K). If you know someone that needs off the Wall Street casino ride, and wants a return backed by a hard asset, this is a great time to do this.
Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
6y
@Mark Sewell That's correct. I am paying 1 point to get 4.5% for refi. Usually cash out is 1% higher than refi so 3.2 points with 5% is not bad deal. I am good anything with 5-5.5% on investment homes.
Real Estate Agent · Houston, TX · Member since 2017 · 292 posts · 233 votes
6y
Good replies and it's helpful to see multiple points of view.
I know that nearly every SFH at 150k or under, in a C+ or better neighborhood, is getting multiple offers in 1 or 2 days on the MLS. Even needing 20k + in repairs, there are lots of buyers out there.
The luxury market seems most exposed, but this goes back to almost all new builds being 3000+ sq. feet monsters. The affordable housing issue seems to be sweeping in from the West coast!
Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
6y
For sure @James De Stefano in fact I just read article that we are actually underbuilt going into this downturn.
It would be interesting to see some graphs/charts on the correlation between DOM and square footage. The only small stuff that sits on the market is the stuff that is priced crazy. I have to wonder who is buying that 1500 sf 3/2 built in 1982 for $190K (that needs work) when they can cross the street and get a new house for $230k-$240k...? Or maybe that's no longer true, are new houses not being built for that anymore?
For sure @James De Stefano in fact I just read article that we are actually underbuilt going into this downturn.
It would be interesting to see some graphs/charts on the correlation between DOM and square footage. The only small stuff that sits on the market is the stuff that is priced crazy. I have to wonder who is buying that 1500 sf 3/2 built in 1982 for $190K (that needs work) when they can cross the street and get a new house for $230k-$240k...? Or maybe that's no longer true, are new houses not being built for that anymore?
Only new houses I know of being build for those low prices are the DR Horton ( or similar) entry level builders. That's not an area I focus on, but I have been to plenty of "starter home" builds from the early 2000's that need rehabs, and it does look like the most bare-bones possible construction.
Not a house I would be excited about owning for the long-haul
Real Estate Broker/Owner & Property Manager · Sugar Land, TX · Member since 2013 · 660 posts · 459 votes
6y
@James De Stefano There are still houses coming on the market in B neighborhoods which are old with good pricing and need rehabs but investors are hesitant to jump on it and stuck with the analysis paralysis mode. I have couple properties in Missouri city which has good potential for BRRRR if purchased HM or cash and rent out but many new investors didn't want to bit it.
Yes, new homes are entry level homes built by KB homes and DR Horton in areas which are outside and close to Grand Pkwy which is getting hot these days.