Rental demand declining (by MikeA [TX]) Dec 3, 2022 2:52 PM|
Rental demand declining (by Pmh [TX]) Dec 3, 2022 3:06 PM
Rental demand declining (by Richard [MI]) Dec 3, 2022 3:07 PM
Rental demand declining (by Robert J [CA]) Dec 3, 2022 3:17 PM
Rental demand declining (by Sisco [MO]) Dec 3, 2022 3:48 PM
Rental demand declining (by LTD [AZ]) Dec 3, 2022 6:02 PM
Rental demand declining (by Mapleaf18 [NY]) Dec 3, 2022 7:01 PM
Rental demand declining (by 6x6 [TN]) Dec 3, 2022 8:34 PM
Rental demand declining (by Robert,OntarioCanada [ON]) Dec 3, 2022 9:30 PM
Rental demand declining (by GKARL [PA]) Dec 3, 2022 9:40 PM
Rental demand declining (by Ray-N-Pa [PA]) Dec 3, 2022 10:45 PM
Rental demand declining (by small potatoes [NY]) Dec 3, 2022 10:59 PM
Rental demand declining (by BRAD 20,000 [IN]) Dec 4, 2022 1:12 AM
Rental demand declining (by zero [IN]) Dec 4, 2022 6:39 AM
Rental demand declining (by tryan [MA]) Dec 4, 2022 8:29 AM
Rental demand declining (by Ray-N-Pa [PA]) Dec 4, 2022 8:38 AM
Rental demand declining (by myob [GA]) Dec 4, 2022 10:40 AM
Rental demand declining (by T [IN]) Dec 5, 2022 7:08 AM
Rental demand declining (by S i d [MO]) Dec 5, 2022 9:06 AM
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Rental demand declining (by MikeA [TX]) Posted on: Dec 3, 2022 2:52 PM
Just read an interesting article that quoted some stats from Realpage who publishes RE market statistics and analytics. It appears that the supply/demand cycle has turned down.
For those that have been watching this a while, this last year there were ton's of analysts predicting that there wasn't enough housing being built to keep up with demand so rents and prices would continue to increase for a few years. I didn't believe it at the time, I've heard things like this multiple times in my life where "this is a new and different situation", there is nothing new under the sun. I have always been skeptical of analysts. There is significant social pressure in scientific & research circles to follow the herd in analysis. They tend to look for the trends that support what their fellow analysts say rather than with an unbiased neutral eyes looking for new trends which is were the real value is.
The question at this point is how low will it go? Lower demand means longer vacancies and lower market rents. This is going to be a difficult time for some newbies that bought at the high point where they had a negative or near negative cash flow and now rent's are going down and vacancies going up. They may have a year or two struggling to keep above water.
Some key takeaways,
In July through September, 82K apartments were returned to the market. This is the first time in 3 decades that demand was negative in Q3.
Rent growth peaked in March 15.7% higher. By September it had receded to 9% higher.
In Q3 "asked for" rent on vacant units declined by .4% and vacancy rates increased by 1%.
Anyone want to make predictions what rents and vacancies will be like this time next year? How about impacts on ability to find good deals?
Rental demand declining (by Pmh [TX]) Posted on: Dec 3, 2022 3:06 PM
I donít know where you are, but where I am there is continuing high demand & I set my rents accordingly. There has ALWAYS been high demand for rentals in my mkt. college town. --107.115.xxx.xx
Rental demand declining (by Richard [MI]) Posted on: Dec 3, 2022 3:07 PM
Here's my predictions:
The rents on B type properties will go down because the majority of people hurt in the recession which will have large wage losses will be in the B level jobs. They will have less money so they will have to look for and take lower priced rentals. The A levels won't be hit as hard as there are less of them and the A level jobs are more needed than the B level jobs.
The C level home rents will remain pretty strong because the C level earners are the largest group that actually pays rent with the money they earn and not govt money. In addition, the B level people will be competing with them for the rentals.
I think the C level homes will not go down as much percentage wise as the B level homes.
Rental demand declining (by Robert J [CA]) Posted on: Dec 3, 2022 3:17 PM
I say the value in key Cities can decline as much as 40% in value. Remember the prices now are way over inflated, by as much as 20%. So a correction is inevitable. Sell your worst properties and exchange them (tax free) into better more stable income types. --47.156.xx.xx
Rental demand declining (by Sisco [MO]) Posted on: Dec 3, 2022 3:48 PM
Richard, if B houses drop close to C house rental rates, the C house price will be under pricing pressure.
I think that 2023 layoffs will be as shocking as 2022 inflation has been. --149.76.xxx.x
Rental demand declining (by LTD [AZ]) Posted on: Dec 3, 2022 6:02 PM
I was in Phoenix yesterday. We live a pretty sheltered life in our little resort valley in northern AZ. People freak out if there's a minor crime, or a piece of gravel on the sidewalk and demand the city, "do something."
I literally hadn't been in a big city since last winter. I was/am shocked by the explosion in homeless camps. Last year there were none (that I encountered). Now they are in the suburbs. They were everywhere and we just saw a tiny bit. Must be tens of thousands of folks on the streets.
I think it's not demand that is down, but that people can't afford rent. They are being forced into multi generation housing (living with parents, etc.) They are moving into motor homes and tents, being priced out of traditional lifestyles. Then some turn to drugs, and that's the end. We saw the fentenal zombies, standing in gutters bent over, seemingly asleep, others doing the "tweaker dance." It was eye opening and mind boggeling. I don't know if it's the same everywhere, but this was a wake up that I'm still processing.
Yet construction is exploding. Miles of massive tilt up warehouses with 5 acres under roof going up along the outter loop and I-10, thousands of SFH's. There is a disconnect in what we are being told and the reality in the dirt.
I read somewhere the other day that a decent one bdrm apt requires a $40/hr income (can't find the link). But here's a link saying you need over a 200k income to buy an average home in LA these days.
I think we are seeing the tip of an unsustainable iceberg. Rents can't come down too far, taxes, ins, utilities certainly aren't going to go down. I'm developing a growing concern for the future. --47.216.xxx.xxx
Rental demand declining (by Mapleaf18 [NY]) Posted on: Dec 3, 2022 7:01 PM
Rentals were returned to market most likely due to eviction court finally catching up to the moratorium surfers.
Will more under 30 set decide to move in with parents/relatives and thusly the demand for rentals decreasing? Most likely.
Will the "help wanted" signs go away in 2023? You betcha. --64.246.xxx.xx
Rental demand declining (by 6x6 [TN]) Posted on: Dec 3, 2022 8:34 PM
Amazon has built a brand new warehouse here, but has decided not to open it yet.
There is a bunch of new apartments being built close by. I wonder how that will play in now that Amazon is not opening.
Rents have gotten really high here. It appears that 2br is renting for more than 3br. I don't really understand that.
Rental demand declining (by Robert,OntarioCanada [ON]) Posted on: Dec 3, 2022 9:30 PM
Some owners have 100 per cent equity or are in position of paying off in less then a year. Owners that can do major renovations and repairs can upgrade as costs are lower as no contractors are required. Take two rental units where one is $1,400 per month and the other is $900 per month with the same size where the lower one is energy efficient then ask which one is going to rent first during difficult times. It does not cost a lot to go to the dollar store then buy LED light bulbs. Sealing up windows and pipe insulation is not expensive. Where control and pay for heat, hot water they use much less as the windows are closed up tight in the winter months along no waste. HVAC equipment lasts longer as less use. A town or city that has immigration will have lower vacancy rates. If there are many industries then it is better position. --68.69.xxx.xxx
Rental demand declining (by GKARL [PA]) Posted on: Dec 3, 2022 9:40 PM
I think rent levels in many areas have gotten ahead of itself and many people are in a position where they just simply can't afford the rents. I think there will be a downward adjustment in terms of rents in certain markets. Most likely it would be those same markets where prices of real estate generally have run up quite a bit. I definitely agree that newbies who brought at the peak are going to be in a world of hurt. We will know we have hit bottom when those guys are out of the market and real estate becomes a normal investment as opposed to a crazed hunt for a deal. --209.122.xx.xxx
Rental demand declining (by Ray-N-Pa [PA]) Posted on: Dec 3, 2022 10:45 PM
Rental properties are like a basket full of goods. To get the place built you needed carpenters, plumbers, masons, electricians, painters, finishers and flooring specialist.
When I hear that rent increases went from 15% down to only 9% when the inflation rate is only 7 and a fraction percent, that tells me that demand is greater than the market forces.
Where demand growth might be slowing, it is still greater than inflation rate. Which in my eyes - Sounds like a good time to have rentals. --24.101.xxx.xxx
Rental demand declining (by small potatoes [NY]) Posted on: Dec 3, 2022 10:59 PM
it was hard to fill my last vacancy as I reported here. Had just a tricle of leads and more competition than in recent times. Everyone was installing new flooring and putting up a for rent sign. I thought I was priced in the middle and it was still difficult. I stuck to my medium price 995 up from 950 for my nicest 2 br, but I think rents adjusted down to where it was really worth 900 ish, and will continue to bottom out. Leads were few and far between. in a month of zillow I only had 26 inquiries. A higher number of them converted to prescreening but they were the same unqualified masses as before. As for B and C tenants we will see a stratification that worsens by 2024. Better off folk are doing ok, but the working class and low income will not climb out of the upcoming recession because inflation is smothering any wage gains. This whole demographic will become the new rust belt. NYC mayor Adams (not the brightest perhaps) has called for the homeless to be removed from the streets (like that will happen in NYC). The concerning part is that the way democrats are shaking up the primaries, theoretically means a progressive could be the front runner. Watch out if they win an election. --72.10.xxx.xxx
Rental demand declining (by BRAD 20,000 [IN]) Posted on: Dec 4, 2022 1:12 AM
No slow down here. I think the media is looking for problems to create some news.
With our number of units there is always a vacancy coming or going.
But not now. We are totally full, with apps coming in asking to call them when we get an opening.
I am amazed at the prices we and others LLs are getting.
Rental demand declining (by zero [IN]) Posted on: Dec 4, 2022 6:39 AM
I have no problems with filling my empty, even though I had to do it twice.
Both new tenants admitted that I am asking less than I should for the apartment. I am not in a big area, but I fear that I might have left some money on the table. --107.147.xx.xxx
Rental demand declining (by tryan [MA]) Posted on: Dec 4, 2022 8:29 AM
Watched a few peaks n'valleys in the hood over the last 30 years. Home prices will trend downward from peaks and rents will follow because the new owners can function on less and want to attract the best candidates .
Just as natural as the tide.
And yes, those who bought at the peak will be forced into negative cashflows. Can't re-fi, can't sell. A world of pain. Just ask the buyer of my last SF in the hood . --198.168.xx.xxx
Rental demand declining (by Ray-N-Pa [PA]) Posted on: Dec 4, 2022 8:38 AM
I do have to say that the importance of screening has increased over the past three years.
I believe I am getting more leads than ever - but the loins share are simply no where close to being qualified for a class B place. --24.101.xxx.xxx
Rental demand declining (by myob [GA]) Posted on: Dec 4, 2022 10:40 AM
HENNIE PENNIE is alive and well on this site.
Your RE investors??? Remember?? You make your bones In every economy.
Bad economy is buy time. Good economy raise the rents.
Recession rent incentives. --66.133.xx.xx
Rental demand declining (by T [IN]) Posted on: Dec 5, 2022 7:08 AM
Everyone is talking about this doomsday in economic news. My .02 analogy: we have been on the interstate doing 80mph for the last 2 yrs. We got off the interstate and our a US why doing 55 mph. Still moving along at a good clip, but feels really slow compared to our 80 mph.
You will have some vacancy that takes weeks to rent vs. having a waiting list this past 2 yrs. But it won't be months like a bad recession/depression would be. If you run a good biz, take care of the properties, price it right... you will always be able to find a renter. --170.203.xxx.xxx
Rental demand declining (by S i d [MO]) Posted on: Dec 5, 2022 9:06 AM
100% full here, still getting top rents. No downward adjustments. My market is much more in balance than the Coasts and other hot markets, so I doubt we see much, if any, rental declines here.
The problem everywhere continues to be low levels of entry level housing. No one is building 2-bed room units unless they are apartments. This comes at a time when Baby Boomers are retiring in droves and seeking to downsize. They're stuck with at minimum a 3/2/2 starting at $1/4 million.
Interesting article I read recently that Boomers can't find enough housing to downsize into, so they're just staying put in their 4 or 5 bed "mansions". The maintenance costs for these can be prohibitive as folks age and are no longer able to keep up with them. Couple that with the rise of single person households, and we have some challenging times ahead of us in terms of getting enough of the right size housing available for folks with lower incomes who don't need nearly as much house as they did while raising a family.
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