Houston apartment supply higher than demand in 2015

will this mean apartments will be cheaper?

 

No. People are greedy. Artificial price inflation will occur. Still, might mean less increases over time.

 

Don't you know basic economics???? The price will always go up no matter what the supply or demand is ... thats economics 101. My rent is going up 200 bucks this lease so I am moving out of there. Camden can lick my broke nuts.

 

I drive down TC Jester from Washington to get to I-10 everyday, and the new Apartments they built I found out aren't even close to 50% occupancy and they've been open for over 2 years. Now another developer has bought the property south of, right on Washington where Copa used to park cars and they're planning for MORE apartments there. They will never get filled, such a waste of cash.

 

land prices that many of these new deals are on are way inflated and can't be sustained. Multi-family investors get greedy and don't know when enough is enough.

this is the time that real investors start looking to pick up quality assets at a reset capital base.

 

I'm on Eldridge / the energy corridor and they've added about 10 different "luxury" apartment complexes over here. I know damn well they're not all full or anywhere near it, and yet the prices have gone up and up. Needless to say I'm moving when my lease is up.

 

It seems like apartments are going up by the day near me -- the area behind Microcenter on 610/San Felipe. The new one they just built and also 2121 look dead to me as-is. A new one behind St Regis might be move-in ready this week for all I know and there's another 3 within .2 miles from there currently in construction!

 

Finally my chance to move inside the loop!

 

I haven't noticed house prices going down yet despite the looming oil money dip. In fact I've seen new builds increase in price by $10,000 as recently as last week. When exactly would the housing market start to turn?

 

I don't think it matters a lot if an apartment is at 100% occupancy. They probably build as many units as they can on the plot of land they own because what else would you do with it? If they're at 50% capacity but making enough to continue to operate with a profit on those units then there's no need for them to decrease the rent on the other units and deflate overall market rental prices. Then everyone gets into a price war and eventually have to operate at 75% or 100% which wouldn't have happened in the first place. There's only so big of a pool of people at one time.

 

Probably in about 6 months to a year when you start seeing major layoffs.

 

The average buyer just isn't aware of what's coming or what? I'm wondering if I should sell my rental property now to preserve buying power when everything takes a dip or just ride it out.

 

1Q 2015 would be my guess for the earliest that would happen. That's when my company's "reorg" will happen.

 

it will also be market specific in downturn. The Woodlands has the artificial bubble of Exxon and several other corporate relocation driven demand drivers.

A realtor I was speaking to recently has already seen the slowdown begin in Katy.

The office market is seeing the signs now. They are the leader - everything else follows.

 

excellent idea if you bought low and have maxed out your value. Given that you'd have to 1031 within 12 months, you're probably slightly premature. Don't want to bet too early and have to reinvest before it's dropped enough.

 

Is it time to evacuate Katy.....before their property values go down?

 

Most average buyers have no clue as to economic factors influencing their property values. I've been recommending all my colleagues and friends who hold rental or property in Houston to sell for whatever they can get and buy later when the market values are much lower.

Look at this recent Tilman Fertitta interview on Bloomberg. He's looking at a 1986 scenario in the Houston market. Whatever anyone may think of the guy, he is still pretty smart.

http://www.bloomberg.com/video/tilm...-like-1986-coming-j2rFvvu~Rbq87Gyv1G9Ryw.html

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Look at US Crude Oil production. They are going to be producing even more in years to come.
In an email Thursday, Deutsche Bank economist Torsten Slok sent around the following chart, showing the explosion in US crude oil production over the past few years.

Slok wrote: "The most important reason why oil prices are falling is because of the dramatic increase in recent years in US crude oil production ... and US oil production is expected to increase further by 1 mmb/d in 2015 and 0.6-0.7 mmb/d per year in the years to 2020. In other words, expect a continued increase in oil supply going forward."




And finally observe the ten most overvalued housing markets in the USA.

http://www.bizjournals.com/houston/...-toward-a-housing-bubble.html?s=image_gallery

 

a) we don't have the oversupply that occurred in the 80's
b) population growth will continue to occur because of the business friendly environment and low cost of living

we are due for a correction - not a bubble burst. We already had that and it wasn't based on valuation it was based on inflating demand by allowing every tom dick and harry to buy a home. home loans are more stable now. oversupply is generally only happening in apartment and office - both of which aren't nearly near the oversupply of the 80's (check TAMU's real estate research center and look at permit activity over the three to four year period during that time frame)

It's not the first time I've seen this 80's correlation bandied about recently (Rand Stevens with Avison Young penned something recently).

Not saying you are corroborating it, just that I don't buy into it at all given the fundamentals going into it.

Here's my boy Patrick's most recent update for GHP http://www.houston.org/economy/blog/index.html#november202014