Real Estate Facts!
Just like evaluating a property, one of the keys to understanding your market and your industry is knowing your numbers.
An understanding of real estate facts and statistics helps you to identify movement in local markets and better predict the right neighborhoods, properties, and features to invest in.
What follows are some of the statistics that you need to make better investment decisions. The good news? Low inventory, excessive student loan debt, and the ever-growing Millennial cohort create strong indicators for a strong and growing US rental market.
In addition, you’ll find out where some of the most promising local markets are concentrated as well as some of the facts you need to know to effectively evaluate property managers in those areas.
Real Estate Pricing Facts
The US Median home price for 2019 is $277,000, with starter homes averaging $219,000. (National Association of Realtors)
Starter home inventory rose 3.5% in the first half of 2019, while trade-up inventory rose 4.8%. At the same time, ongoing low inventory means prices rose 12.4% and 8.3% respectively. (Forbes)
Bidding wars in the hot San Francisco housing market tanked from 75% of offers to just 22% in Q2 2019. (Forbes)
A projected economic downturn or recession could mean lower interest rates over the next year or two with the prime lending rate expected to decline to 4.75%. (Kiplinger)
Real Estate Buyer and Seller Facts
“Unexpected repairs and maintenance” was cited by 36% of homeowners as their biggest home buying regret. (Zillow)
2020 is expected to see the peak of Millennial homebuying. (Realtor.com National Housing Forecast)
For 78% of home buyers, neighborhood quality is more important than home size. 57% would rather have a shorter commute than a larger lawn. (NAR)
For Sale by Owner properties accounted for 7% of home sales in 2017. (NAR)
The average days on market before an offer was accepted was 40. (Redfin)
Millennials will account for 45% of mortgage borrowers in 2019. (Realtor.com)
Student loans represent $1.7 trillion in debt, negatively impacting the ability of younger, college-educated adults to buy homes. (Forbes)
12 million US homeowners spend more than half of their income on rent. (PWC Emerging Trends in Real Estate)
Real Estate Rental Facts
Rental costs increased in 66% of US counties between March and April, 2019. However, in many markets, especially on the West Coast, it is still more affordable to rent. (Realtor.com)
The number of over-60 renters increased by 43% between 2007 and 2017 as retiring Baby Boomers chose to rent rather than buy when downsizing. (RentCafe)
The fastest rent growth in the US occurred in Henderson NV (4.8% increase) and Mesa AZ (4.4% increase) in 2019. (Apartment List)
In 2019, average rent growth nationally was at 1.6%, lagging behind the 3.1% growth in wages. This was welcome news in the midst of the housing affordability crisis in most major markets. (Apartment List)
The most expensive rental market is still San Francisco, with an average rental rate of $3,690. (Zumper)
Approximately half of renters are spending more than 30% of their income on rent. (PWC Emerging Trends in Real Estate)
The average rental home was built in 1974 while the typical owner-occupied home was built in 1978. (American Housing Survey)
In the last two years, multifamily property construction increased by 21%, indicating an anticipated market shift toward rentals. (Born2Invest)
36.6% of US households are renting, the largest percentage since 1965. (Pew Research Center)
Real Estate Market Facts
According to a study by Apartment List, the best towns for families are both located just outside of Indianapolis: Fishers and Carmel IN. Dallas, Houston, and Miami are considered the strongest markets for buyers with the lowest numbers of competitive bids for houses. (Redfin)
In a survey of Millennials, 84% were willing to forego key amenities and home features in favor of their ideal location. (Trulia)
Home sales in the sunny South are expected to rise by 6% this year, in contrast to the national average of 2.5%. (Realtor.com)
The average real estate market lifecycle -- involving a pendulum swing from a seller market to a buyer market and back again -- is 10-16 years. (US News)
The two most active real estate markets in the country, based on buyer activity and active inventory, are Boston MA and Lafayette IN. (Realtor.com)
Madison WI and Grand Rapids MI are the most popular markets for relocating Millennials. (NAR)
Troy MI is considered the country’s most affordable rental market. (Apartment List)
Property Management Facts
In 2018, US property management accounted for about $76 billion in revenue, and is expected to climb even higher in 2019. (iPropertyManagement)
Property managers cited Efficiency (32%) and Maintenance (31%) as their biggest challenges. (iPropertyManagement)
According to a study from Harvard University, spending on remodeling is expected to top $350 million by Q3 2019. This is an increase of almost $20 million over the same period in 2018. (US News)
Demand for smart home products is on the rise. Of those surveyed 63% want smart home security, 63% want smart home climate controls, 58% want smart lighting, and 56% want safety devices like carbon monoxide detectors and nightlights. (Venturebeat)
Millennials are most likely to forego a garage, with 34% seeing these as unnecessary. (Born2Invest).
According to Zumper, here are the Top Ten Rental Amenities tenants are looking for in 2019:
The least-searched amenities were:
Dry Cleaning Service
Study the market, demographics, and trends in order to know where to buy, when to exit, and how to optimize the value of your investment properties. And remember, with the right property management, you can take advantage of robust rental markets anywhere in the country.