2019 will be much like 2018 – but with a bit more anxiety.
The fundamental forces that have driven rents and home prices higher – more demand for housing than supply – will continue unabated. There just hasn’t been enough construction over the last years to keep up with the demand that is increasingly concentrated in big cities (but not all of them). And – good news – in these big cities the demand is mainly for rentals.
The anxiety comes from two possibilities – that a slower economy will erode the demand for more housing – and that prices are already so high that investors won’t get enough of a return to justify new investments. In short, maybe all the good deals are gone?
My own view is that investors do indeed have to approach some markets with more caution in the new year, but that there are still plenty of opportunities available. It is important in 2019 to pay closer attention to the stats in local markets.
Let’s look at some stats from our Investors Metro Monitor reports.