Strong growth in rental demand. Forecasters say demand will continue to grow for rental housing, based on a continued weak job market. Employment is expected to improve at a slow rate, which could increase demand as more people move out of shared housing situations.
A continued soft housing market. Losingrenters to home purchases will probably not be a big issue for rental property owners. In some areas, such as Texas, home sales started increasing in the last half of 2011. Wherever employment growth occurs, demand for rentals will continue, and some home sale increases are expected.
Lower than normal supplies of multi-family housing. While construction permits are increasing and new development is starting to happen, most big construction projects are still in the planning phase. In most areas, new supply levels won’t be much higher in 2012. Exceptions are Washington DC, Dallas, Tex. and Orange County, Calif.
Higher occupancy rates. The economy will continue to produce renters for low- and mid-tier properties. High-end properties are still in high demand, but as wages stagnate, more renters will be pushed into lower rents, driving those occupancy rates higher.
Rent growth of 4% to 4.5%. Property owners who continue to increase rents could see higher turnover; others will likely see value in keeping existing tenants.
Top Ten Rental Markets for 2012
- San Francisco will continue to lead the nation in apartment rental growth, followed by:
- Austin, Tex.
- San Jose, Calif.
- Oakland, Calif.
- Boston, Mass
- New York City
- Denver, Colo.
- Dallas, Tex.
- Charlotte, North Carolina
- Houston, Tex.
Continue reading here: What Landlords Can Expect in 2012′s Rental Market