Tag Archives: Rent prices

A recent industry survey found rising home prices are impacting investor activity in a few ways--most notably encouraging them to hold properties longer and to decrease their purchase activity. The survey, conducted by ORC International, revealed more than half of investors plan to keep their investment properties for five years or more. Investors in these categories ""realize the benefits of rising rents and low vacancy rates,"" according to Chris Clothier, a partner at MemphisInvest.com and Premier Property Management Group.

Although the multifamily sector leads the commercial real estate market in terms of performance, the National Association of Realtors (NAR) expects the apartment rental market to see its vacancy rate tick up over the next year. The NAR projects the multifamily vacancy rate will rise from 3.9 percent in the second quarter to 4.1 percent during the same quarter in 2014. Though, according to the NAR, a vacancy rate of less than 5 percent makes the sector a landlord's market, where demand justifies increases.

As institutional investor activity continues in California, PropertyRadar decided to take a look at who these investors are and their purchase patterns. To rule out smaller and individual investors, PropertyRadar tracked transfers in qualities greater than 10 from an LLC or LP. The firm reported LLC and LP purchases represented only 5.1 percent of transfer activity in 2012 and 4.5 percent in 2013. However, upon closer examination, PropertyRadar found institutional investor activity was mainly concentrated in certain counties.

The majority of metros covered in Zillow's Real Estate Market Reports saw home values inch up from March to April, the company reported Tuesday. Zillow's Home Value Index increased 0.5 percent month-over-month and 5.2 percent year-over-year. April marked the sixth consecutive month in which home values appreciated more than 5 percent on a yearly basis. According to Zillow, the last time national home values were at this level was in June 2004.

According to Zillow, in 64 percent of U.S. metros, buying is more affordable than renting if homebuyers plan to stay in their home for at least three years. In several large metros, it would only take around two years before a buyer reached what Zillow called the ""breakeven horizon,"" or the time it takes for buying to become more financially advantageous than renting. Out of the 30 largest metro areas, Zillow found Miami and Detroit had the shortest breakeven timeline of just two years in the first quarter. In New York, buyers would need to stay in their homes for 5.2 years before reaching the breakeven horizon.

Asking home prices posted the strongest gains in cities where job growth was also solid, according to Trulia. In a recent report, Jed Kolko, Trulia's chief economist, provided two reasons to explain the link between jobs and housing: job growth attracts newcomers to an area, who look for housing, and job finders often look for their own place to rent or buy. ""Young adults with jobs are much less likely to live with their parents than those without jobs. Furthermore, stable jobs will set this generation free to form their own households and start thinking about homeownership,"" Kolko added.

While home affordability has reached record high levels, for renters, housing cost burdens have been steadily increasing. According to the annual Housing Landscape report from the Center for Housing Policy, 26.4 percent of working renters spent more than half of their household income on housing costs in 2011. The share is an increase from 2008 when 22.8 percent of working renters had a severe housing cost burden. CHP provided two reasons the burden of renting has grown: falling incomes and rising rental housing costs. For example, the report found the median housing cost for working renters rose nearly six percent between 2008 and 2011, yet median incomes fell more than three percent.

After months of robust and largely unsustainable annual home value appreciation, the national housing market finally showed signs of moderation in this year's first quarter, Zillow reported Thursday. Quarterly home value appreciation in the fourth quarter was 2.1 percent--indicating the market is slowing down to a more sustainable pace, says Zillow chief economist Dr. Stan Humphries. Looking ahead, the company's Home Value Forecast shows national home values rising 3.2 percent through March 2014, an annual appreciation rate more in line with historic norms.

Over the past couple years, rentals of single-family homes have served as a growing segment of the housing market. However, lately limited supply and rising home prices are leading to rising rents, thus slowing growth in this market, according to a report from CoreLogic. Having been on the decline since 2009, single-family rental properties now have about a 2.9-month supply available on the market. For comparison, anything below six months supply in the purchase market is considered low. The result of tight supply, naturally, is rising prices.

Before deciding on an REO-to-rental investment, it's important to understand distressed property trends on a neighborhood-level, according to DataQuick. This is why the San-Diego-based company has made available the REO-to-Rental Neighborhood Rankings for servicers and investors.