Welcome to San Diego Blog | March 27, 2018
Rental Market Trends for 2018
With the ever-changing nature of the rental market, it’s critical to stay ahead if you want to remain a competitive force. Enter to win a free ticket to #ICSF: http://bit.ly/2IrgBbw
Posted by Inman News on Wednesday, March 21, 2018
2018 is going to be an exciting year for the rental market! The video above talks about some anticipated trends and the notes below highlight the main points.
- Occupancy rates, 2017 dipped from peak in 2015 and 2018 is predicted to be even lower. However, it is still up at 94% so don’t panic! This does mean that renter’s will not be as easy to find in the past andmany companies are finding that they need to adapt their customer service model to retain and attract more residents.
- Effective rent growth – This refers to the amount rents will increase over a given year. 2017 had the lowest effective rent growth in 10 years which ties back into the lowering occupancy rates. With lower occupancy rates renters have more choices and landlords do not have the option to raise the rent as it may cause vacancy, which is always more costly. Long term average is around 2.2% so the market is still above average but is continuing its slow down.
- Migration – San Diego is having negative migration, meaning more people are moving out of town than in. Prices are getting higher which drives people to submarkets. For comparison Riverside has one of the highest rental growth rates.
- Home-Ownership Rates – Still at Historic lows with the same ownership rates as the 1960’s. This drives the rental market as less people can afford to buy. Home Loan Rates are increasing as well, making home ownership even more expensive. With lower occupancy rates people have more choice in their living environment and when given the choice 32% of people chose small/medium apartment buildings, 28% choose single family homes, and 15% chose large apartment/condo buildings.
- Age Trends – As the population ages more people are exploring rental options, whether those be in senior living facilities or empty nesters looking for a change. 65+ population is projected to increase by almost 20 million from2014 – 2024.
If these trends make you nervous and you want some professional help please give us a call at 619-541-8839!
Source: AppFolio and Inman News