Just Released 4th Quarter 2018 Leading Rental Income Markets
The Center for Real Estate Studies (CRES) research report has just released their fourth quarter 2018 issue of “Market Cycles". It gives a forward look at more than 150 income rental markets with “buy and sell” recommendations. This publication gives the real estate investor a two-year head start on where and when to invest in income rental properties.
- (1888PressRelease) January 14, 2019 - LOS ANGELES, CA. - The current number of markets in the “Sell Phase” is forty-one, according to Eugene E. Vollucci, Director of CRES. The number of markets in the “Buy Phase” is fourteen. Mr. Vollucci states, “This quarter the three top buy recommendations are Spokane, WA, Houston, TX and Lake County, IL-WI. The three top sell recommendations are Brownsville, TX, Jacksonville, FL and Memphis, TN.” according to Mr. Vollucci.
In this edition of our Market Cycles, we find the National vacancy rates in the third quarter 2018 were 7.1 percent for rental housing and 1.6 percent for homeowner housing. The rental vacancy rate of 7.1 percent was 0.4 percentage points lower than the rate in the third quarter 2017 and not statistically different from the rate in the second quarter 2018 . The homeowner vacancy rate of 1.6 percent was virtually unchanged from the rate in the third quarter 2017 and 0.1 percentage points higher than the rate in the second quarter 2018.
The third quarter 2018 rental vacancy rate was highest outside Metropolitan Statistical Areas (MSAs). The rates in principal cities and in the suburbs were not statistically different from each other. The rental vacancy rate in principal cities was lower than the third quarter 2017 rate, while rates in the suburbs and outside MSAs were not statistically different from the third quarter 2017 rates. The homeowner vacancy rate was lowest in the suburbs . The rates in principal cities and outside MSAs were not statistically different from each other. The homeowner vacancy rates in principal cities, in the suburbs, and outside MSAs were not statistically different from the third quarter 2017 rates.
The US unemployment rate rose to 3.9 percent in December 2018 from a 49-year low of 3.7 percent in the previous month, and above market expectations of 3.7 percent. It was the highest jobless rate since July, as the number of unemployed persons rose by 276 thousand to 6.3 million. Unemployment Rate in the United States averaged 5.77 percent from 1948 until 2018, reaching an all time high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953.
The labor force participation rate, at 63.1 percent, changed little in December, and the employment-population ratio was 60.6 percent for the third consecutive month. Both measures were up by 0.4 percentage point over the year.
US Median Asking Rent is at a current level of $1,003.00, an increase of $52.00 or 5.47% from last quarter. This is an increase of $91.00 or 9.98% from last year and is higher than the long-term average of $583.50.
We feel that rental income properties completions will remain high in 2019, but new construction will slow down. We, at the Center For Real Estate Studies (CRES), project that in the coming year, development costs will increase and financing will be harder to get which will curb the pace of new additions.
However, the demand should remain high for rental income properties, causing a balance in net absorption next year. Vacancy will creep up and rent growth will be slower. We project that rental income properties will continue to attract investment capital, and supply/demand will be in balance.
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