Just Released Second Quarter 2016 Leading Rental Income Markets

Palos Verdes, CA. The Center for Real Estate Studies (CRES) has just released their second quarter 2016 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. End Quote

(1888PressRelease) July 12, 2016 - The current number of markets in the "Sell Phase" is thirty-eight, according to Eugene E. Vollucci, Director of CRES. The number of markets in the "Buy Phase" is eighteen. Mr. Vollucci states, "This quarter the three top buy recommendations are Chattanooga, TN-GA, Lancaster, PA and Syracuse, NY. The three top sell recommendations are Modesto, CA, Houston, TX and Bridgeport, CT. According to Mr. Vollucci, we are trying to project how Britain's pull out of the EU will affect real estate values in the US. We should no more in the coming months.

Unemployment rates were lower in May than a year earlier in 333 of the 387 metropolitan areas, higher in 49 areas, and unchanged in 5 areas. Twenty-four areas had jobless rates of less than 3.0 percent and two areas had rates of at least 10.0 percent. Nonfarm payroll employment increased over the year in 311 metropolitan areas, decreased in 70 areas, and was unchanged in 6 areas. The national unemployment rate in May was 4.5 percent, not seasonally adjusted, down from 5.3 percent a year earlier.

187 areas had May jobless rates above the U.S. rate of 4.5 percent, 185 areas had rates below it, and 15 areas had rates equal to that of the nation. Nine areas had rate declines of at least 2.0 percentage points. Of the 51 metropolitan areas with a 2010 Census population of 1 million or more, Austin-Round Rock, Texas, had the lowest unemployment rate in May, 2.9 percent. Las Vegas-Henderso, Nev., had the highest rate among the large areas, 6.4 percent. Forty-six large areas had over-the-year unemployment rate decreases and five had increases. The largest rate decreases occurred in Los Angeles-Long Beach-Anaheim, Calif., and Memphis, Tenn.-Miss.-Ark. The largest over-the-year rate increase occurred in Houston-The Woodlands-Sugar Land, Texas

For the first quarter 2016, the rental vacancy rate was highest outside Metropolitan Statistical Areas (MSAs) (9.6 percent). The rates inside principal cities (6.7 percent) and the suburbs (6.6 percent) were not statistically different from each other. The rental vacancy rate inside principal cities was lower than the first quarter 2015 rate, while the rates in the suburbs and outside MSAs were not statistically different from the first quarter 2015 rates. The homeowner vacancy rate was lowest in the suburbs (1.5 percent). The rates were higher outside MSAs (2.0 percent) and inside principal cities (1.9 percent), though these rates were not statistically different from each other.

The homeowner vacancy rate outside MSAs was lower than the first quarter 2015 rate, while the rates inside principal cities and in the suburbs were not statistically different from the first quarter 2015 rates. For the first quarter 2016, the rental vacancy rates were highest in the South (8.8 percent), followed by the Midwest (7.7 percent). The rates were lowest in the Northeast (5.4 percent) and West (5.1 percent), though these rates were not statistically different from each other. The rental vacancy rates in each of the four regions were not statistically different from their corresponding first quarter 2015 rates. The homeowner vacancy rate was lowest in the West (1.2 percent). The rates in the Northeast (1.9 percent), Midwest (1.7 percent) and South (2.0 percent) were not statistically different from each other. The homeowner vacancy rate in the South was lower than the first quarter 2015 rate, while the rates in the Northeast, Midwest and West were not statistically different from the first quarter 2015 rates.

Sixth Year of Job Growth Sustains Household Formation and restrains Apartment Vacancy Amid Supply Influx.
Hiring in the first five months of 2016 drove total U.S. employment to 5.5 million jobs above the pre-recession peak despite a disappointing number in May's first report as reported by Marcus & Millichap. This number is expected to be revised higher due to the resolution of the Verizon strike, and therefore the pace of robust demand for rental housing will remain consistent with the past six years. New renters will continue to flow into the apartment market evident by the further decline of the unemployment rate to 6 percent among individuals age 20 to 34, as this segment has a high propensity to rent. A wave of new apartments came online in many metros during the first quarter this year, placing upward pressure on vacancy rates in many markets and supporting a minor uptick in the U.S. vacancy rate. Even as risks of overdevelopment in a limited number of metros push some local vacancy rates higher, the broader effects of elevated construction volume on the nationwide vacancy rate will remain minimal.

According to Cushman & Wakefield, as the number of 20-34 year olds (prime renter cohort) has increased in the last few years, demand for rental housing has been robust. Even though the rate of growth for the prime renter age cohort slows, the trend is still positive due to a higher millennial.

###

space

Other Related Press Releases