We are just a couple of weeks before the end of 2014 and beginning of 2015. That means its usually time for a short slowdown, getting ready for taxes and goal setting (which is the most important). One thing I usually look at is how the market has reacted over the year and how we should make our adjustments in marketing and selling/investing. What I do is read.....A LOT of reading!!!! One thing I cam across was how the rental market is changing. It has nothing to do with the economy; or less than you think. For the past several years, there has been a growing trend for increased rental properties. Vacancy rates are falling and rents are rising. As much as you might think it has to do with the economy, you might be surprised. Or maybe not, depending on your own personal situation.
Here are some points that are considered:
Job market - The job market is soft at best but up to this recession, the job market had changed from just one generation earlier. It was expected that you work for a company 20-30 years, get a pension and live the 'good life' doing what you want. Not so much now. Workers are much more mobile and job stability is a thing in the past so workers are more nimble when it comes to working for companies. Less loyalty, more focused on the job being a means to an end rather than the center point of life. In my generation, you worked hard, climbed the 'corporate ladder' achieved promotions (sometimes at the expense of others along the way) to reach a pinnacle after 20 years, riding the wave to retirement. Now, workers stay 3-5 years, find something more interesting with more money, taking the experience with them and probably moving. Buying a house makes no sense if they are not going to stay there long. In fact, it could be a real drag holding them down.
Recession - You may never knew there was a recession in your personal life. However, you can bet you know someone that was affected. Seeing others lose their home, file bankruptcy, start over makes most everyone nervous to commit to a long term mortgage. Not knowing the future causes the most secure worker to have butterflies and hold on to renting over buying.
Millennial living in the basement - There is a generation of people that have seen their parents and friends parents work and sacrifice. Some struggle and get knocked down and others succeed but the fact is, Millennials are staying home longer and staying single longer. Not having a mortgage or family gives them more security and confidence in their future. As a result, they will delay in long term commitments by renting a nice home over buying a fixer upper or starter home like their parents or grandparents did
Boomers rent again - As the boomers become 'empty nesters', they still have their health in their 50's and 60's and do not want to spend their lives mowing a yard. Amazingly, you have couples married 30-40 years sadly divorcing leaving one to stay close to the kids and rent for a while. Either way, healthier generations will mean they will want more to do than just maintain a house and will want their freedom to do what they want when they want.
There are always exceptions and other reasons but you get the idea that the real estate market is not what it was 40, 30, 10 or even 5 years ago. Making adjustments as an agent, makes agents better and serve their clients better. If you are considering purchasing a home for yourself or as investment, find a reputable Realtor that can professionally walk you through the process. You should feel good about them and consider them a team member on YOUR team. There are plenty of great agents out there too. If you have questions, or suggestions for other posts, please drop me a note and let me know.
Merry Christmas to all and a very Happy 2015 New Year!!
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