Vacancy Rates Fall: How Savvy Investors Are Taking Advantage

WIFI Research Brief: Vacancy Rates Fall | Savvy Investors Take Advantage of the US Housing Industry

The US Census Bureau released housing vacancy data last week. US Home Vacancy Rate is at 2.1%, the lowest level since 2006. The rental vacancy rate has fallen to 8.6% in the second quarter, the lowest level since the second quarter of 2002. According to Bloomberg Businessweek, the US has added 5 million renter households from the time the homeownership declined from its peak rate of 69.2% in 2004 to the current rate of 65.5%.

Ending the downward trend that ran for nearly 13 weeks, the 30-year fixed mortgage rate has increased to 3.55% from the last week rate of 3.49%. However, the rates are supposed to remain low. Fed is expected not to change key interest rates low until 2014 even if does not introduce some economy boosting measures.  With mortgage rates remaining low, the rental vacancy and home vacancy rates declining, this is the right time to jump into real estate investment. Mr. Donald Trump reaffirmed faith in the US Housing industry in his interview with CNBC, and Bloomberg Business Week reports that Warren Buffet’s Berkshire Hathaway reaps gains from increased real estate investments.

It does not surprise us that novice investors are concerned about remote investing. Most investors would like to be active investors managing the properties, but it is not an easy job to be a landlord. It is best to leave the property management to professionals even if you invest in your backyard unless landlording is your full time work. There is reassurance from a survey released by AllPropertyManagement that Professional Property Managers [PPMs] actually decrease rental vacancy rate by nearly 40%, and PPMs manage to keep the cost of rehabbing the homes well below what individual landlords incur. The average vacancy rate for fully managed properties is 5.5% compared to the US average of 8.6%. HomeUnion® Services does the necessary due diligence to associate you with professional property providers who are well versed in property management.

It is worth noting that foreign investors are taking full advantage of US housing industry. According to the National Association of Realtors, China contributed 11% of the total $82.5 billion in residential property sales in the 12 month ended march 2012, and Canadian investors contributed 24%.

How are HomeUnion®’s cash flow zones faring in the economy? Indianapolis ranked # 1 in the Most Affordable Cities list reported by CNN Money with and a Home Affordability score of 95.5%. (Median price: $102,000; Median Income: $66,900). What are the cities worth considering if there is freedom to invest or relocate?  Among Bloomberg Businessweek’s 50 best places to live, Kansas City was ranked at #43, Atlanta at #32, and Pittsburgh at #24. HomeUnion® has certified property providers in these cities to market fully managed cash flow properties in decent neighborhoods that generate rental income.

The US Department of Labor reported 1.6% decrease in the unemployment rate with 28 consecutive months of job growth across all industry sectors excluding government sector.

For those who love to dig into details, we cap the weekly summary by recommending a neat infographic released by the US Census Bureau on the state of US Economy.

The WIFI Research Brief from HomeUnion® offers weekly insight and expertise into the rapidly transforming Single Family Residential real estate industry. WIFI stands for “What is in It For the Investors”. The WIFI Research Brief is published by top industry professionals, showcasing time-sensitive market information and valuable industry analysis.

Ready to learn more? Schedule a call