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Just Released 2nd Qtr 2018 Leading Rental Markets
LOS ANGELES, CA. The Center for Real Estate Studies (CRES) research report has just released of "Market Cycles". It gives a forward look at more than 150 income rental markets.
In this edition of our Market Cycles, we find the following residential vacancies and homeownership statistics for the first quarter 2018 were 7.0 percent for rental housing and 1.5 percent for homeowner housing. The rental vacancy rate of 7.0 percent was virtually unchanged from the rate in the first quarter 2017 (7.0 percent) and not statistically different from the rate in the fourth quarter 2017 (6.9 percent).
The homeowner vacancy rate of 1.5 percent was 0.2 percentage points lower than the rate in the first quarter 2017 (1.7 percent) and 0.1 percentage point lower than the rate in the fourth quarter 2017 (1.6 percent). The homeownership rate of 64.2 percent was not statistically different from the rate in the first quarter 2017 (63.6 percent) and virtually unchanged from the rate in the fourth quarter 2017 (64.2 percent).
The national apartment vacancy rate rose to 4.8 percent in the second quarter from 4.7 percent in the previous quarter, with 41 of 79 metros reporting a rise in vacancy, Reis said in a statement, "We expect construction to remain robust for the rest of 2018 and in early 2019, before completions drop off in subsequent periods. Occupancy is expected to remain positive, although vacancy rates are expected to continue to increase as new supply will outpace demand growth." Reis went on to say, the national average asking rents edged 1.3 percent higher and effective rent grew 1.2 percent for the quarter. Net absorption rose 1,141 units to 37,265 units in the second quarter, while construction was marginally higher at 50,360 units.
The US unemployment rate rose to 4 percent in June 2018 from 3.8 percent in the previous month, which was the lowest since April 2000. The number came above market expectations of 3.8 percent as more entered the labor force. The number of unemployed persons increased by 499,000 to 6.6 million. A year earlier, the jobless rate was 4.3 percent, and the number of unemployed persons was 7.0 million.
US Median Asking Rent is at a current level of $954.00, an increase of 44.00 or 4.84% from last quarter. This is an increase of $90.00 or 10.42% from last year and is higher than the long-term average of $577.00. At $981, real median gross rent in the United States was at its highest level in 2016 since the series began in 2005. At $1,050, real average gross rent in the United States was at its highest level in 2016 since the series began in 2005.
According to U.S. Department of Commerce US Census Bureau, after a three-month period, there were a higher percentage of units absorbed renting for less than $950 (67 percent), than units renting for between $950 to $1,049 (42 percent), and $1,150 to $1,249 (37 percent). The absorption rate for units renting in the $1,050 to $1,149 range (64 percent) was higher than for those units in the $950 to $1,049 and $1,150 to $1,249 ranges. Units in the $1,250 to $1,349 (49 percent) range and those renting for more than $1,350 (59 percent) did not differ significantly from each other, and there were no other statistical differences when 3-month absorption rate percentages were compared across the six asking rent ranges.
This year "will likely remain challenging for many landlords and apartment investors," says Victor Calanog, chief economist and senior vice president in the New York City office of data firm Reis Inc. Apartment rents are likely to keep growing on average through 2019, even though rents are not growing nearly as much as they used to. "Short of a recession—which not even the Federal Reserve's Comprehensive Capital Analysis and Review projections are expecting any time this year—apartment fundamentals will likely weather this storm," says Calanog.http://www.calstatecompanies.com