Estates Texas
North Texas – Best Property Rental Market in 25 Years
The enormous imbalance that always seems to exist in North Texas has once again taken this market to extremes. While the real estate sales world crumbles around us, the world of rentals is better than ever. Apartment and single family home occupancy is very strong, rents are stable or slightly increasing, and compliance seems to be better. In the first half of 08 only 16% of our tenants breached leases; down from 22% in 2007. Though it’s still over triple the national average, it is positive. The time it takes to rent a home is faster than ever (average 49 days) and the ONLY empty homes are the ones not 100% ready or those over priced. Though real estate prices are falling, you would have lost less money in it than the 16% stocks have fallen since July 07. A glimmer of hope for sales in this market is the inventory of homes for sale which reduced by 10%, probably because we are leasing them so easily, and sellers need cash. This could help stabilize the market as fewer homes are available to choose from for purchase. The country is not fairing as well. In Detroit, 80% of the homes are being sold to investors. In Youngstown, Ohio there were over 1,000 vacant homes bulldozed. Delinquent mortgages are up 15% in the US, and the average credit card debt balance rose to $9,312.
National foreclosures will approach 3 million homes posted, and here in North Texas as many as 60,000 homes will post in 2008. Yet statistically, and through the amount of new move-ins we experience, the rental market is breaking new records every month. North Texas continues to add new jobs: 8700 in May alone and that is a positive trend (until over building starts up again). Unemployment increased 1/2 % which means we need to create more jobs to stay positive; nationally it was up 1%.
Industry Trends
I still believe long term, North Texas will remain one of the most challenging markets to successfully invest in. We still face the country’s worst credit risks and despite an easing of non compliance, a tremendous percent of our population breaches leases. Bargain prices attract uneducated investors who jump on deals without doing adequate research. Would you believe we have dozens of properties vandalized each month just for copper metal? This could easily be avoided if purchasers would do a little research on the areas they are buying in and the property crime statistics. As I look at the national landscape of depressed real estate markets, I still believe more in the future of the depressed US coastal areas. All it takes is one stroke of government intervention and the supply of tenants from homeownership to rentals will slow our market and put it back into the “challenged zone.” So I say to all of you to enjoy this market while it lasts; it has NEVER been this good. In real estate, they say the most important factor for success is location. As a property manager, properties in less desirable locations or properties in less desirable condition will always suffer. Home values declined in Oak Cliff 19% this year already proving that challenging areas are always hit hardest. It is our quality rentals that are impeccably made ready that get multiple offers at full price. I hope you will ride this wave of opportunity with me to fill your properties with quality long term tenants.
Source: Get There First Realty Services – Texas Rental Property Management
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