Local W. Seattle real estate news, statistics, and insight.
Harvard University recently published a report of the rental market in the United States. This study included rental-market trends over the last decade and predictions for the next ten years. One of the most surprising facts from the study is that renting a home has become a more common option for almost all types of Americans.
Is the next great real estate opportunity investing in rental properties? Harvard University recently published a report of the rental market in the United States. This study included rental-market trends over the last decade and predictions for the next ten years. One of the most surprising facts from the study is that renting a home has become a more common option for almost all types of Americans.
These are some of the results found in the report:
This housing study also looked at America’s largest rental markets. Three out of four of the biggest population centers had vacancy rates of less than five percent. Typically, 95 percent occupancy is considered full occupancy by property management professionals. Only one out of the 75 biggest markets had a vacancy rate that was over 7 percent.
Because vacancy rates are low and demand is high, property owners have been steadily increasing rents. While renting has become popular with people in different economic classes, it may be the only choice for people with modest incomes. The main concern of the study was not that landlords would have trouble finding people to lease properties but that people with lower incomes would be unable to find affordable housing in many parts of the county.
The study predicted an even greater demand for rental apartments and houses in the next decade. The baby boomer generation is now aging into senior citizens. The authors of the study believed that many seniors would choose to sell their houses in order to cash out their home equity and enjoy the simplicity of renting.
If the predictions in this study are correct, many of those sold homes will get converted to rentals. This is because upcoming generations don’t seem as eager to buy a house as their parents or grandparents once were. The study cited higher levels of student loan debt and tighter qualification rules for mortgages as some possible reasons.
Even though both small and large investors have been supplying more inventory to satis the needs of all kinds of renters, the supply is not keeping up with the demand in some places. The next great real estate opportunity in the United States might be an investment in rental property. Vacancies are very low and rental prices are rising. Of course, markets differ across the country and even in different parts of the same city, so wise investors should do their research.
Condos for sale in West Seattle - Sales trends May 2016 vs. May 2015
Homes for sale in West Seattle - Sales trends for May 2016 vs. May 2015
My experience with buyers in the Seattle area is they want to know as much as they can about a home before making an offer. So as a seller its a good idea to be proactive and have answers to their questions ready before you list your home for sale. Here are some of the more basic questions home buyers ask:
Major retailers spend a lot of time and money researching up and coming neighborhoods in city like Seattle. Purchasing a home near a future site of a retailer that caters to a deeper-pocket clientele should help increase the value of your home over the long-term compared to a home in a similar neighborhood without one. Many people do make home purchasing decisions based on the accessibility (or walkability) to their favorite retailers.
Here is a great article regarding this real estate effect.
I'm often asked why are there so few home available to purchase here in the Seattle area. There are many reasons but here are some on the main ones.
1. Economy - the Seattle economy is doing very well making it a very good time for residence to buy. Its also drawing in new people every month, moving here to get in on our good fortune.
2. A New Baby Boom - the Millennial generation is huge and they are just now starting to reach the typically age that people purchase their first home. This echo of the Baby Boomer generation is doing the same thing that generation did in the 60's and 70's.
3. Loan Eligible Again - almost all of the home owners that went through short sales and foreclosures during the Housing Bust are now loan eligible again. As a matter of pride many of them want to get back into home ownership.
4. Slow Development - During and after the Housing Bust most developers, builders and lenders were very skittish about building too quickly or at all. Many that survived the Bust are still licking their wounds while so many others didn't make it. Although development had returned it take a long time to get that manufacturing engine really humming again. Lending for new construction development has still been a huge set back as most small builders are having to borrow from high interest private lenders.
5. Fear of the Market - I talk to home owners all the time that would love to move to downsize or buy into a different location. They know that the current market conditions are ideal to sell, but they fear having to become one of the masses trying to buy a new home. So they are sitting on the sidelines and deciding to stay put rather than making their home available for purchase.
Here is a great synopsis article writing but he National Association of Realtors if you'd like to read more about reasons why there is a supply shortage of homes.
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