As owners of multi-family properties look ahead to 2020, there are still plenty of recent findings that point toward an optimistic outlook, despite news about rent control or the economy over the past year.
Real estate investors face volatile financial markets and the threat of a recession, but according to the Emerging Trends in Real Estate 2020 report by PwC and Urban Land Institute, slow but sustainable growth is very likely over the next five to ten years.
Allwest Commercial Properties, an Orange County commercial real estate brokerage firm is keeping an eye on these following trends in the multi-family market in 2020:
“Hipsturbs” continue to be popular
While millennials have been criticized for their apprehension to home ownership, that has benefitted multi-family owners and investors. The report details how “hipsturbs,” or suburbs located close enough to large cities or metro areas that offer a live/work/play setting, access to transportation and walkability are highly desirable.
These markets are equally attractive to investors, considering multi-family housing is preferable to millennials as well as downsizing baby boomers who still choose to rent. These renters are looking for areas that are destinations in and of themselves with enough retail and restaurant offerings nearby, but also close enough to urban cores.
Attractive markets for investors
Certain metro regions with a lower cost of living and strong job markets are attracting new residents, many of whom are fleeing more expensive cities and states. If you’re looking to invest in a hot market, you’ll want to check out the following cities.
These cities were at the top of the list for Top 20 Markets for 2020:
- Austin, Texas
- Raleigh/Durham, North Carolina
- Charlotte, North Carolina
There’s still good news for Southern California investors: While the region is known for its high cost of housing, Los Angeles and Orange County are ranked high on the list as 9 and 18, respectively, due to the robust local economy. Downtown Los Angeles, in particular, has had a resurgence in its multi-family sector.
Affordability will still be an issue
Rates of home ownership are down to 63 to 64 percent compared with only a decade ago, according to the report. Single-family home ownership, however, even in areas that have boasted low housing costs, are flat or seeing a decline, which makes multi-family housing an important part of the puzzle.
Apartment living is on the rise as people are on the hunt for affordable housing. Roughly half of American renters spend 30 percent of their income on housing. Still, apartment rentals are feeling the squeeze, as employers experience a shortage of workforce housing options.
While rent control is only a small part of the overall affordability issue, people in their 20s and 30s tend to arrange co-living situations in order to make their housing situation work for their budget. This is an important concept for multi-family investors, who may want to focus on designing apartments and dwellings that make roommate living more amenable as we see this trend continue.
Consult with Us for Your Next Investment
As your Southern California real estate specialists, Allwest Properties, Inc. offers a full range of real estate services for commercial, industrial, and multi-family apartment properties throughout Los Angeles, Orange, San Diego, Riverside, and San Bernardino counties.
With over 25 years of industry experience, we offer a comprehensive array of solutions, including sales, leasing, tenant representation, landlord representation, investments, site selection, and consulting services. Our goal is to exceed our clients’ expectations with each and every transaction.
Contact us today by calling 949-287-3291 or emailing firstname.lastname@example.org.