Rentals could be the next boom in the real estate market. With the job market struggling to stabilize, many people find qualifying for mortgages difficult. In this climate, more people are choosing to rent and great properties in good locations will continue to hold their value. Chief economist of Zillow, Stan Humphries, says that “the stage is being set for very strong rent increases.” As the demand for rentals goes up, property managers will be able to adjust their rents to meet this demand.
It is estimated that over a million people are transitioning from single family homeownership into the rental market after potentially going through a foreclosure. “Foreclosures make up about 35 percent of home sales, a trend likely to continue for another two or three years,” says Jed Smith, managing director of quantitative research for the National Association of Realtors.
Stan Humphries reasons that as home prices continue to fall and the number of foreclosures continue to rise, more people will be moving into apartments. This may come as good news for people in the multi-family housing industry.