The Future of The Housing Economy and Rentals
As we continue to watch the shifts of real estate this year, our drive to build high-yield residential investment properties in well-located, high-demand neighborhoods becomes an attractive option for Meridian Pacific Property investors looking to grow their portfolios.
Looking at appreciation comparisons by metro area, the higher appreciation in Memphis supports the belief that people are moving out of big cities and into secondary markets and into suburban single-family rental homes. Rentals continue to be an attractive option nationally. The lack of inventory plus rising home prices in the current buying market across the country is enough reason to keep renters from becoming homebuyers, giving rental homes more value. The Rental Housing Journal points out the increase of single-family home rentals:
Strong demand for single-family home rentals since the Great Recession and a lack of available homes to purchase for rentals have some investors constructing single-family communities for the purpose of renting. In recent years, the number of build-for-rent homes (BFR) accounted for five to 10 percent of the new homes constructed; however, the numbers are growing, especially in the Sun Belt metros with lower land prices, including Atlanta, Phoenix, and Houston. These assets could increase competition for larger suburban apartments.
Read the article on suburban rental housing here.
Wells-Fargo and Mortgage Bankers Association reported that “single-family starts rose 15.3 percent to a 1.238 million-unit pace in March and are running 19.3 percent ahead of their year-ago pace through the first three months of this year.”
Meridian was an early adopter of the build-to-rent model long before the phenomenon started gaining traction. The valued experience we have gained in our 30+ years of real estate investing continues to provide refined products and approaches for our investors and development.
Working with us eliminates entering the heated competition in the MLS market. We control our inventory and price our homes fairly or at fixed prices so clients don’t have to worry about getting involved in the inevitable bidding wars.
As COVID-19 restrictions continue to lift throughout the country, experts predict that the economy will be on the rise and the real estate market will remain healthy throughout 2021. Housing appreciation is expected to slow, but not crash, making Memphis and surrounding subdivisions appealing locations to continue investing. Memphis still has room to grow based on the strength of the local economy, the thriving job market, and the fact that it’s considered an under or fairly valued market. We expect appreciation in Memphis, and nationally, to return to historic norms in the near future.
According to economists Mark Vitner, Charlie Dougherty, and Nicole Cervi in Wells Fargo’s Real Estate and Housing Commentary, consumers are eager to spend on various discretionary services that are slowly reopening. This uptick in consumer activity is predicted to, in turn, boost the housing market and increase employment rates.
You can read the full article from Wells Fargo to learn more.
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