2013 was the year of housing recovery, as well as the year of historically low vacancy rates for rental properties. As the overall economy continues its recovery in 2014, housing prices and interest rates are expected to keep rising. On a local level, Tucson and Southern Arizona experienced significant gains in 2013, with December showing the most promising improvements since 2007. Sales Volume, Units Sold, Median Sales Price, Average Sales Price and Inventory of Listings were all up between 4% and 16% in 2013, while Foreclosures were down by a whopping 40% for the year – the lowest level since 2007. All factors combined indicate a positive trend for housing in 2014.
“As more Americans, especially the Millennial Generation, are able to secure employment and better jobs, we expect there to be a movement out of their parents’ houses and temporary living situations, into rental properties,” said Kirk McGary, CEO of Real Property Management.
According to some estimates and United States Census data, around 31 percent of 18-34 year olds in the U.S. lived with their parents in 2013, 44 percent of which did not have gainful employment. The U.S. unemployment rate hit a five-year-low this January to 7 percent amidst continued strong job growth, signaling that things will be turning around financially for many Americans and thus improving living standards.
As for Americans looking to buy in the coming year, new mortgage standards set to take effect in January and rising interest rates will make it more difficult to secure a mortgage in 2014, meaning many will continue to rent. This combination of trends creates a unique opportunity for investors looking to expand their portfolios.
“Quite a few families were burned by foreclosures and bad mortgages during the housing crisis, the result of which is wariness on both sides of the equation,” said McGary. “You have lenders being cautious and individuals being cautious of borrowing large sums again.”
“We’re going to see some demographic and supply and demand shifts within the rental market in 2014, but all in all, the market will remain strong for investors and stakeholders,” added McGary.
Real Property Management Rincon is the Trusted Leader in Tucson Property Management. For more information on upcoming investment seminars and investment opportunities in the Tucson area, contact us today at 800-639-9830.