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Rental Housing Market in 2018 Winston Rowe & Associates

The multifamily and residential rental markets are trending upward.

BLOOMFIELD HILLS, Mich. - April 15, 2018 - Rezul -- There are 4 trends that are shaping the residential rental markets heading into 2018.

1. Supply of Rental Units

Real estate market experts predict that three groups of people will drive demand for rental units in the coming years: young Millennials who are in prime renting age, older Millennials who are saving for a down payment, and aging Baby Boomers looking to downsize.

It often takes time for the housing market to catch up to built-up demand, but it is starting catch up. In 2017, apartment construction reached its highest level in the past 20 years. Many of these new apartments will be available in 2018, creating a greater supply for renters and an opportunity for property owners.

2. Slow Down of Rental Increases

The relentless shortage of housing has lead to dramatic increases in rental rates. However, market analysts predict that these dramatic price increases will likely slow in the coming years as housing becomes more available.

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While vacancy rates remain historically low, these figures hide the true issues. Landlords, especially those who own units in the high-end market, are offering more concessions to keep units filled. These figures indicate that double-digit rent increase is likely to slow down in the coming years.

3. Increased Ownership and Acquisition Opportunities

The lower property prices will allow older Millennials to purchase their first home, however, in the long-run, the demand for rentals is expected to increase. The reduction in prices is good for property owners looking to expand their portfolio and first-time home buyers.

Most market experts agree that the long-term prospect for the rental market is that it is going to increase in demand. Millennials are only now earning sufficient income to leave their parents and start leasing their own places. In fact, the economy is only now beginning to pick up enough heat to benefit this demographic.

4. Long-Term Increase of Rents

For example, rents have slowed in the high-end market but not in the low to mid-range rental market. Market experts believe that the disparity in price increases is due to the lack of development for low and mid-range units.

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Therefore, there is an opportunity for property owners to fill that niche. Developers are focused on building fancy, multi-story residential towers that are fabulously expensive.

However, there are only so many six-figure earning Millennials to rent these units. The largest growth is expected in the low to mid-range market which is under served.

For many property owners and investors, these shifting demographic trends represent a prime opportunity to fill in that service gap. As more boomers become renters and Millennials start looking for their own place, landlords will benefit from these shifting demographic trends.

Winston Rowe & Associates a national commercial real estate financier and publisher of free eBooks developed this article. They can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

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Source: Winston Rowe & Associates

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