MReport March 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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20 | M R EP O RT FEATURE R ental demand continues to grow in 2020, giving real estate investors an immediate opportunity to make money in the coming year. According to the Urban Institute's Housing Finance Policy Center, single-family homes for rent are the fast-growing segment of the U.S. housing market with an estimated 3.4 million millenni- als preferring to rent rather than buy a home. However, due to tight rental inventory, the biggest challenge that investors will face in the coming year is finding solid opportunities in some of the most desirable markets. In order for investors to be successful in 2020, it's important to pay attention to emerging trends in the SFR space. Markets to Watch L ucrative deals will continue to be available to real estate investors across the United States, but watch out for dwindling inventory and lack of affordability in certain markets. Forward- thinking investors need to know where to look to track down opportunities and overcome po- tential challenges. Also, it doesn't hurt to stay on top of rising trends even for investors who already have specific markets they prefer to invest in, just in case they decide to branch out. According to the Urban Land Institute and PricewaterhouseCooper's "Emerging Trends in Real Estate 2020" report, the top five highest- ranked markets for investment and development opportunities in the coming year are Austin; Raleigh-Durham, North Carolina; Nashville, Tennessee; Charlotte, North Carolina; and Boston. These markets ranked high because they provide abundant employment op- portunities and a good quality of life. Surrounding opportunities and activities within or around these top markets also have the pos- sibility of making the area more enticing to potential renters. Austin is one of the top five because it is slated to have the highest popula- tion growth over the next five years. The city has major expan- sions underway, such as Apple's $1 billion investment in a North Austin Campus, the recent open- ing of Dell Medical School, and the expansion of the Austin-Bergstrom International Airport (ABIA). Charlotte, North Carolina, has quite rapidly become a destina- tion that individuals are flocking to. With history in the banking industry, this location is also beginning to attract technology and manufacturing firms, allow- ing for diversity in the workforce. On top of its airport expansion, Charlotte has also focused on light-rail growth and continues to look forward towards more transportation projects. Also in North Carolina, Raleigh is rapidly expanding and is shaping up to be a technology magnet in the tech industry. It continues to grow its stock of large multifamily and office spaces for the influx of new residents. Boston is unofficially consid- ered to be the Capital of New England due to the major role it plays within the entire region regarding economic performance and real estate vitality. From edu- cation and culture to rich history and diverse neighborhoods, this city offers endless possibilities and opportunities. This hub has not only become a top attraction with its powerful educational institu- tions but also with its opportuni- ties in the technology and medical industries. Each of these destinations offer countless activities, events, and opportunities. The biggest issue with these markets is that the cost of homeownership is still a challenge, making them attrac- tive to renters. This can be seen as a boon to investors who want to hold rental properties in these rapidly expanding locations. REALTOR Magazine further delved into this topic and flagged additional markets as "Ripe for Discovery" based on the fact that they had populations exceeding 1 million and displayed double- digit growth rates. Additionally, these locations are included in this category because respondents are rather favorable of the area and their surroundings. However, real estate investors do not find enough consistency within the markets, which leads to hesita- tion in investment. Markets to watch include Jacksonville, Florida; Salt Lake City; Columbus, Ohio; Cincinnati; and Louisville, Kentucky. Jacksonville, Florida, has quickly become a destination that people are keeping an eye on. This location is favorable to those who are looking for a high quality of life in the suburbs with easy access to the bigger city. Jacksonville ranks among the top 20 when it comes to potential for home development, and it is also an area to look out for regard- ing potential retail and industrial property markets. Greenville, South Carolina, has taken the time to revamp its downtown area by incorporating new office spaces, craft breweries, restaurants, and condominiums. With the addition of numer- ous activities, this growth has Checking the Forecast for SFR From promising markets to the emergence of build-to-rent, here are the top trends investors should have on their radar in 2020. By Jeffrey Tesch

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