18
TRENDS AND
TECHNOLOGY SHAPING
THE HOUSING MARKET
By Heath Silverman
So far in 2019, the headlines continue
to be dominated by 2018 stats: December
was Wall Street's worst since the Great
Depression, U.S. existing home sales
dropped sharply in December down 10.3
percent from the year prior, and many hot
coastal markets like Seattle and New York
are softening dramatically. To top it all off,
there are growing fears about the global
economy. Even the Fed has announced it
is going to be "patient" before raising rates
again. It is easy to get overwhelmed; as a real
estate investor—what should one expect for
the coming year and beyond?
I am cautiously optimistic that 2019 will
likely be a good year for real estate rental
property investors overall. Home price
growth will continue to slow thanks to rising
interest rates and increasing inventory. e
market is changing noticeably in formerly
hot cities like San Francisco where I live.
at being said, there are a number of factors
that can play out positively for the savvy
investor:
» Renters Abound: Whether it is a favored
lifestyle or inability to buy homes, the
number of people renting continues to hover
around all-time highs.
» Apartment Vacancy Lows: U.S. apartment
vacancy continues to stay low even with the
wave of new construction hitting the market.
In particular, Class C vacancy is the lowest
on record, and there are almost no new Class
C buildings coming on the market.
» Employment Growth: ere are currently
more job openings than unemployed, and
young adult unemployment is at a record
low. While the labor shortage could slow the
growth cycle, it will definitely lead to wage
increases.
I am particularly bullish about workforce
housing located close to transit hubs within
30 minutes of large downtown areas or more
specifically, older multifamily buildings that
you can pick up for below replacement cost.
Some people think of workforce housing as
"affordable housing," but I prefer to think of
