01. Moderating Rent and Home Prices
The past years have seen extremely steep growth in home prices and rent. The economy has a natural cycle when home prices and rents become unsustainable. The economy seeks balance through price correction until supply reaches demand.
“The inflation we’re seeing in home prices may feel reminiscent of the housing bubble we experienced a decade ago. However, our more conservative home buying and lending process now prevents consumers from paying far more than a house is worth, or more than they can reasonably afford. Because the growth we’re seeing isn’t unrestrained like it was in the mid-2000s, we’ll see a slow and steady glide toward more reasonable rates rather than a crash,” Buildium.com writes.
02. Rise in Secondary Markets
We have seen extreme price growth in primary markets like San Francisco and New York in the past years, but prices will gradually decrease back to a sustainable long term rate. Secondary markets like Nashville, Charlotte, and Raleigh will see a growth in interest as 2018 renters, homebuyers, businesses, and investors seek more spaces in smaller cities.
03. Construction Labor Shortage
The tight housing market of 2018 will still stay affected as the diminished construction labor force continues. Single family homes will be hard to come by, current homeowners will stay put as new construction will fail to meet demands, and the available housing will sell at record speeds. In addition, rebuilding efforts caused by natural disasters will become a recurring strain on the construction of single-family homes.
The recession forced migrant construction workers to flee the country in search for jobs; today, immigrant policies restrict them from coming back. Younger workers are entering the industry slower than older workers are leaving, creating a 1 in 3 construction job fill rate which puts a strain on homebuilding time and drives up workers wages. This ultimately shrinks developers margins forcing developers to build luxury properties which don’t address the current affordable home crisis.
04. Investor and Property Manager Opportunities
As secondary markets like Nashville, Charlotte, and Raleigh bring in new completed units, rent growth and increased occupancy rates create a huge opportunity for investors and property managers looking to grow their business in 2018.
Technology is the future of every industry, including property management. The internet and mobile devices have changed the way we communicate and do business. Technology in the home will have a huge impact on competition for businesses. Renters seek out convenience more than ever by the way they want to communicate with you, pay their rent, sign leases, report maintenance issues and more. A smart way to get a leg up on the competition is to integrate these technologies and systems into your units.
06. Diversity in Renters
Now more than ever people are becoming renters. In 2018, an apartment building will be home to a young professional with roommates, a family who’s credit keeps them from becoming homeowners, and a retired couple who no longer can justify the cost and upkeep involved in owning a home. Adapting to your renters needs has never been more critical. Millennials are entering the housing market, but are not becoming homeowners at the same rate as other generations. At the same time, Baby Boomers are retiring and downsizing, becoming renters. This has created a wide range of demands and expectations among today’s residents which will need to be cared for.