Houston Coronavirus Tracker Update 7/11/20
HOSPITALIZATIONS. I'm feeling that this data is becoming increasingly more unreliable as the counts increase. I don't think this is nefarious - more a function of slow reporting from a system under stress. If anything, the numbers are probably worse than what we are seeing reported. ICUs appear to be very near full.
A COUPLE OF CHARTS FOR CONTEXT. As Houston struggles with one of the country's most severe outbreaks, some context would be useful. The first map below shows the progression of coronavirus outbreaks by state since April - suggesting a wave movement to the virus. The second map reflects that 42 percent of all COVID deaths in the US come from just three states—New Jersey, New York, and Massachusetts. These three states account for nearly 56,000 of the nearly 133,000 deaths in the US, even though they represent just 10 percent of the population. There seems to be a 3-5 week lag between cases and deaths and although Houston's numbers will undoubtedly rise, Texas' per capita death rate is an order of magnitude lower than these three states.
WHY YOUNG PEOPLE ARE SPREADING THE DISEASE. It is virtually undisputed now that the spread of the virus now is among those aged 20-40. There's a very credible reason why we are seeing this; an effective policy would do better to recognize the motivations here and address them.
GDP DOWN 35%, UP 15%. The latest estimate is that GDP declined 35% in the last quarter and forecasts are for 15% this quarter and continued but declining increases going forward.
CREDIT CARD TRANSACTIONS SUGGEST SLOWDOWN. It's a small dip in just one data point, but it appears Texas consumer spending is reversing trend and heading downward. It is not certain yet how accurately this indicator will predict recovery trends, but it is worth watching.
NEW HOMES. The new home market has remained fairly resilient given the twin health and economic crisis the city has faced this year. After increasing significantly in June, sales have remained flat in July.
Weekly YOY sales continued to increase as we passed the half-way mark for the year. A second shutdown is a significant risk here to sales - you can see the affect of the first shutdown in weeks 14-17.
2020 average closing prices recovered from the spring declines related to the first shutdowns, but have dipped again in July. We'll try and chase this down this week.
At just over 3,200 contracts pending sales have remained steady.
Terminations have remained higher in the Under $200K and $200-$299K price ranges, probably reflecting the segment most affected by pandemic-related shutdowns. Over $1 million is also up slightly over last year.

Terminations were higher in April 2020 than 2019 and then reversed -- it would appear that they are increasing again in the first two weeks of July.
Home rentals remain strong, with only slight declines in March and April. In the monthly rental ranges most competitive with new homes, there have been more leases in 2020 than last year.
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Stay well.

Scott Davis
Location Strategy, LLC