According to a recent CNBC piece the May nationwide apartment occupancy rate is 95.3%, or wise stated, it is FULL. With such high occupancy rates you could expect that rents would also climb and that is exactly what happened. The rent nationwide grew 5% in May, the fourth straight month that this has occurred. Needless to say, landlords are off to another great year. The Urban Institute’s Lisa Goodman states in the article that homeownership nationwide is at 63.7%, the lowest level in 25 years, and will continue to decline until 2030. What happens in 2031 she couldn’t say because I guess her crystal ball got fuzzy. She did predict that there will be 22 million new households formed in the next 20 years and that 13 million of them will be renters. Goodman stated that the Millennials today are a much more diverse lot than baby boomers both racially and ethnically and that means less homeownership. Why this is so was not stated and to me is a puzzling statement. Goodman further stated that higher rents will drive some Millennials to homeownership “if” they can scrounge up down payment. The down payment is becoming elusive for many folks because home prices keep rising, rents keep rising, and paychecks aren’t (can’t) keep pace with raising rents and home prices.
And this is where we investors in Austin area real estate come into play. We don’t rent out apartments, we rent something much better. We rent out nice looking, single family dwellings that are well maintained. This product appeals to this large rental pool that gets larger daily. And don’t forget, our area is attracting a vast segment of those Millennials because the Austin area offers the things they are looking for. Work with good pay, a clean environment, live music, and a “can do” attitude. If the traffic would go away this place would be close to paradise!
So to sum, owning Austin area real estate is a fantastic investment and looks to stay that way for a long time, or at least until 2030.