The multi-family and single-family rental markets are continuing to make headway throughout the nation, according to a report recently released by HomeUnion. While the end of 2015 was somewhat rocky for the U.S. economy, it has regained traction through the start of 2016 to prepare itself for what economists believe to be a promising year.
An interest rate hike is still expected from the Federal Reserve following the late 2015 bump that was the first increase seen in the past decade. On top of that, employement and the labor market are having a good year as well.
Rental demand and investor opportunity
By calculating job growth figures and supply and demand in cities throughout the nation, HomeUnion ranked the top cities on combination of investment opportunity and return in 2016. Jacksonville took the top spot, followed by Charlotte and Indianapolis.
Few cities made both lists for opportunity and high demand of rental units. Fort Lauderdale was the only market to snag a spot on both.
The Bay Area made a big apperance on the list of high-demand markets, with San Franciso, San Jose, and Oakland all pricing high and having strong demand for rentals.
Milwaukee, Tampa and Indianapolis were all ranked as high-yield real estate markets. While San Antonio didn’t make the list of where investors are prone for high returns, its nearby neighbor, Houston, did make the cut.
Nationwide in 2015, 300,000 of the 460,000 new households created were rental properties, taking vacancy to an increadibly low rate below 5 percent, which is widely considered full occupancy.
Houston rental market conditions
Houston was previously considered one of the strongest local markets in the nation, but the fall of oil prices pumped the breaks on the thriving community. But that still isn’t stopping investors from showing strong interest or renters from looking for a place to live.
Houston is resilient like other Texas cities, and its economic diversity has enabled it to remain strong as the oil industry falls. Still, oil companies are cutting jobs and consolidating — like Woodlands-based Newfield Exploration Co., which has closed and consolidated numerous offices thought the nation since 2015.
According to HomeUnion, the Houston job market is still expected to grow in 2016, with 25,000 new jobs created and an increase in payroll of 0.8 percent. Rent is forecasted to climb 2.1 percent this year, bringing 2016 monthly rents to $1,448 per month. Vacancy is expected to increase 6.8 percent, with a stampede of new apartments expected to hit the market in 2016.
