The real estate market was in a reactive state in 2018 after Hurricane Harvey hit towards the end of 2017, and the Houston real estate market in 2019 is still feeling the effects on building cost and affordability. Yet with millennials’ dual mindset of renting and buying combined with an emphasis on technology development, opportunities continue to grow.
How’s the health of the new home market?
The new home market slowed down at the end of 2018 with close to 30,000 new homes built, and total homes built in 2019 is projected to be lower. The most pressing concerns remain the cost of building, finding available land, and affordability. Yet with Houston’s forecasted job growth (an additional 71,000 jobs in 2019), we could see a resulting increase. Some trade agreements have also brought the cost of certain building materials down, such as framing. Interest rates remain low across the board, less than 4% for a primary residence and less than 6% for an investment. The reality is people are still selling, and people are still buying.
How can new homes be kept affordable?
The Houston market has been facing higher construction, labor, and material costs in 2018, and affordability remains a concern. So what are builders and investors doing to keep homes affordable in 2019? The answer is building smaller homes. A trend we expect to continue seeing is the construction of homes on smaller lots, about 1,400 – 1,500 square foot in size. We’re valuing space and convenience over larger homes with a larger price tag.
Has selling rehabbed, flooded homes been successful?
If you’re considering fixing a flipping a property that flooded during Hurricane Harvey, focus your attention on properties with first-time floods that are not located in a flood zone. Noble Mortgage provided multiple, successful loans in 2018 on flooded houses that followed these criteria. Properties in areas such as Bear Creek have also sold for more than what they were worth before they flooded. As you fix and flip previously flooded properties in 2019, continue to listen to lenders and wholesalers to gauge the best investment opportunities for you.
What’s up with millennials?
With the issues of affordability, is the market turning to renting or buying? Well, millennials are doing both. This generation prefers a smaller space and would rather rent to keep the ability to easily move. Yet in 2018, millennials drove $200 billion spend in buying investment properties. So why both? Millennials understand the value of owning an investment; however, they choose to rent their living space after witnessing the impact of the 2008 housing market crash. With their interest in both buying and renting, the millennial society presents considerable business opportunities in 2019.
How has technology development impacted the Houston market?
Technological advancements are making the Houston market more accessible as investors from not only around the United States but globally as well are purchasing investment properties in Houston. Companies are also in the process of innovating ways to make the exchange of properties easier. Big data is even being used to learn and understand the traits of individual investors to better match them with potential properties in an effort to replace mass email blasts.
Interested in hearing more about Houston real estate forecasts for 2019?
Watch the full panel from start to finish here on Facebook.
Interested in speaking to a lender about fix and flip opportunities?
Contact Noble Mortgage today. We provide hard money and conventional loans for residential and commercial properties.