Cameron,
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Total Portfolio Performance at a GlanceRent Collection Rate: 95.4% (vs. 92.6% Houston average) Eviction Rate vs Houston Average: 4.1% (vs. ~9% Houston average) Occupancy Rate vs Houston Average: 87.5% (vs. 90.8% Houston average)
Performance remains strong with a slight blemish in occupancy.
Rent collection dipped slightly because we filed a new eviction (only our 7th this year). Eviction rate continues to fall as we work through last year’s cases. We’re filing less than one per month this year, so nothing recent gives me cause for concern.
Occupancy has been a little below average for several months. The main driver is the new vacant properties we’ve onboarded. New properties always take longer to turn than existing ones because of the new-owner relationship, and this year nearby competition has made leasing tougher.
Rest assured, once we get a resident in the property, the chances of them renewing stay high.
An important note if you're thinking of selling.
Several new owners hired us because they couldn't sell at the price or timeline they wanted.
Why?
Because the sales market is facing incredibly strong headwinds.
Quick Note: If you’re in that spot and still deciding whether to rent or sell, you can download our free guide How to Lease Your Houston Home in 30 Days which is a step-by-step guide for Houston homeowners who need to lease fast, protect their property, and make a smart decision under pressure.
Active listings are up 6.3% to 40,192 while home sales are down 5.7% to 7,030, and days on market rose to 58 days!
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This means supply is likely to keep growing for two reasons: People aren't buying what's currently listed. More people are listing their homes for sale.
I know you shouldn't ask the barber if you need a haircut, but if you're thinking of selling (unless you're in a financial pinch), I would strongly encourage you to wait until spring.
To make matters worse, last month home-purchase agreements fell through at the highest rate ever.
So even if you accept an offer on your home, the odds of that buyer actually closing are declining.
This is not a sellers market, and from what I'm seeing this is only going to get worse.
Great news if you're an investor looking to add to your portfolio!
Bad news if you're a seller trying to get top dollar.
For the agents and investors reading this, if you have data that says otherwise, please reply so I can publish it.
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Houston Market Snapshot
The Houston rental market update for September: New Listings: 6,877 → 6,878 (FLAT) Leased Listings: 3,645 → 3,761 (3.2% YoY) Average Rent: $2,346 → $2,333 (-0.6% YoY) Average Days on Market (DOM): HAR – 39 days | Emerson – 43 days (10.3% slower).
The good news is the supply of active rental homes continues to decrease.
New listings are flat (they declined year-over-year last month) and leased properties are up year-over-year (also up last month). It’s still competitive, but it’s getting slightly less competitive.
Rents are stagnant, which shouldn’t surprise anyone given the dramatic increase in supply over the past couple years. If these trends continue into the winter, we may see positive rent growth early next year.
Why do I believe that?
Besides the shrinking supply of rental homes, affordability is still keeping a lot of renters from becoming buyers. Here are a couple of relevant articles: Houston is more affordable than many parts of the country, but according to the Zillow article above it still takes 6.2 years to break even on buying versus renting.
A lot of people don’t want to lock themselves into one property for 6+ years. And that’s before you factor in the maintenance and upkeep!
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It wasn’t all good news though.
For the first time, our average DOM was longer than the HAR average.
I reviewed the properties, the listings, and our strategy, and I don’t see anywhere we dropped the ball.
Example: we leased a property in Conroe in 62 days. A neighboring property (same bed and bath count, within 500 feet) took 327 days. Almost a year!
Note: for our clients, our 30-day lease guarantee is still in place: if we don’t have a signed lease and deposit within 30 days of listing, we waive the next two months of management fees, and some of our plans, waive the entire lease fee!
Just because we didn’t drop the ball last month doesn’t mean we can’t improve. The team is already fine-tuning several new initiatives. I’ll share the specifics once we have them fully ironed out over the next couple of months.
TLDR:
The market is still competitive (and in some neighborhoods incredibly oversaturated), but the trends say things are improving.
| Maintenance UpdateMedian Speed of Repair: 6.3 days (vs. national average of ~6–7 days) Resident Satisfaction: 4.35/5.0 Work Orders Cancelled: 30.08%
I had a friend in college who literally tied a string around a fly and "walked it" like a pet.
Unlike my friend, the residents do not have as much fun with pests in their properties.
Median speed of repair crept up last month because of a few pest-control issues that took time to resolve. If you’ve ever dealt with pests, you know it sometimes takes multiple treatments to make sure they’re gone gone.
Resident satisfaction dipped slightly, and one of the 1-star reviews was a bad decision by us.
What was our bad decision? Trusting a new owner when they said they completed the make-ready to our rent ready requirements.
Our process is to verify with an inspection. We took the new owner's word that they would finish the punchlist. When the resident moved in (site unseen), they reported several issues - all of which had been on the punchlist...
Lesson learned: Trust buy verify!
Final note, work orders are still being cancelled at about 30%!
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