I’ve been absent around these parts for a couple of months because let’s face it: Who wants to hear about real estate market statistics when the alternative is to carry your favorite ice cold adult beverage as you contemplate how it will take before the waves reach your beach chair. But now that the tan is starting to fade away, it’s time to get back to business. And what better way to dive right in than to take a look at the performance of Houston’s rental market during the month of August.
Our Houston Investment Grade Rentals (HIGR) Chart brings all good news – In the high quality locations that we track, there were 727 properties leased in August. This is the second highest number of properties leased (after July’s 729) on record and year over year it represents at 14% jump. As you will probably notice from the chart, properties leased and prices typically spike during July and August due to the wave of tenants looking to get situated before kids go back to school. But even after accounting for the seasonal spike, the considerable year over year jump points to a significantly hotter market this year.
Good news also from the price front. The lease price of properties leased during August matched July’s record average of $1638. That level represents a 6.6% increase over last August.
Days on market increased slightly to an average of 22 days (last year’s DOM were 19.74) showing further proof that the larger number of properties sold and higher lease prices did not significantly impact the time properties spent on the market.
Historically, the rental market tends to take a breather during the last quarter of the year with an overall lower number of properties leased. However, rental prices tend to stay unchanged. So does this mean that you should try to time your purchases just right and take advantage of the seasonal spike in July and August?
The primary reason why there are fewer properties leased out is due to the fact that there are fewer properties available for lease during these months. Read: Less competition. And most importantly, if you follow our advice and purchase high quality properties you have a built-in competitive advantage over other plain properties.
You can’t control when the right deal will come along especially in a hot market like this just like you can’t control when a property might need to be leased out again due to a tenant moving out. So, trying to get the seasonality just right can be a costly move.