Demand for single-family lease properties is on the rise in The Woodlands as millennials enter the real estate market and the region grapples with uncertainty due to an oil and gas industry slump, according to local real estate professionals.
Single-family rentals in The Woodlands jumped to 201 in February from 169 in January, according to the Houston Association of Realtors.
This data follows the trend of a growing demand for rental homes in The Woodlands, said Diane Kink, owner and CEO of The Kink Team, a real estate services firm affiliated with Keller Williams. The Kink Team sells multimillion-dollar homes in Northwest Houston communities, such as The Woodlands, Spring and Magnolia.
Rental homes are becoming more popular as potential homebuyers are saving up to make a purchase once uncertainty subsides and more millennials begin starting families, Trendmaker Homes President Will Holder said. Trendmaker owns properties in The Woodlands as well as master-planned communities on the periphery, such as Bender’s Landing Estates and Lakes at Creekside.
“There’s a lot of people in rental homes right now,” Holder said. “So these people in rental homes are not going to rent forever. They’re going to unfold out into the marketplace over the next 24 months.”
Yet, the rental market has picked up over the past year after increased demand has led to higher prices in Northwest Houston, said Felicia Collins, owner and broker at Collins Malone Realty. More individual buyers see rental properties as a more stable investment than stocks, she said.
“You have a lot of cash buyers out there [who] are buying homes and fixing them up and renting them out,” Collins said. “I think maybe with all of the shows on HGTV and with the stock market—it’s up and it’s down—people are looking for something that’s more steady as part of their retirement plans.”
Despite a continued increase in renting leading to more potential buyers, Holder said he still expects a slower real estate market in 2016 until the oil and gas industry stabilizes. Developers and builders will adjust, and there will be fewer home starts, he said.
“We have lots of people living in rental homes and apartments—that’s the good news,” Holder said. “The next thing is—with the decrease in new jobs—there’s going to be a decreased amount of people coming to town who are going to be net new households. So that will impact things, and we’re going to see a slower market over the next 12-24 months.”