Economy, Jobs and Demand Make 2019 Positive
Last month’s rosy US job report is just one more factor that will build up 2019 as a great year in real estate. While many are still pondering the buy vs rent decision, the outcome should be better for all parties in the property industry this year.
What About the Doom and Gloom People?
There’s doom and gloom talk from political pundits, however the economy continues so strongly, that none of the negative forecasts have materialized. The dour talk about 2019 and 2020 may not have much merit at all. With each failed forecast, consumer, investor and business confidence could soar.
The recent economic and stock market turbulence should loosen up a lot of multifamily units and detached homes for sale this winter and spring. Some Realtors are even talking about a surge in sales, then falling back to strong sales during the rest of 2019.
US Housing Demand is Insatiable
As we noted in previous posts, there is a huge demand for apartments spreading forth a decade or more ahead. Tech friendly Millennials are accumulating wealth and forming families at high rates and this will boost demand. The vacation rental market provides yet another boost to property buying.
Yet mortgage rates and mortgage qualifying rules will keep many would be homebuyers out of the market. They will be renting for many years, if lending rates continue to climb. And given the hot US economy, interest rates will be on the rise.
Due to costs of housing in California, we may see more migration from the Golden State to Arizona, Texas, Colorado, and Florida. Will these workers buy or rent in 2019? Migrating workers normally rent until they’re sure of their new situation.
Property managers have plenty of challenges in 2019. Vacancy rates could rise slightly, administration is becoming a burden, interest rates are raising costs, and rents aren’t rising. Will Proptech be the hero?
Last year, 48% of survey respondents to Property Week’s annual Power of Proptech Survey said they believed that tech would impact their revenue over the next 5 year. This time, around 61% of respondents believed proptech will grow ROI — Property Week.
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Tech Really Begins to Disrupt in 2019
It’s changes in the market, in revenue, technology, tenant demand, falling prices etc that change how property managers will work. The rate of mobile adoption will grow faster.
In California, big tech is undergoing painful changes yet demand for software and hardware technology isn’t disappearing despite trade agreements. US demand and production growth will support jobs in Oakland, San Jose, and San Francisco, and keep prices and demand for rental apartments high.
What’s changed in the real estate, property investment and property management sectors is the prevalence of tech solutions. From cloud based apps, to iOT connectivity, to the prevalence of handheld mobile devices for renters and property managers, the property landscape has changed. Proptech is in, and old school management just can’t keep up.
And property managers and landlords are letting renters do the work via tenant screening apps, self-check in, online payment, smartphone communications and maintenance ticket management. Property management apps are doing it all. The bookkeeping and accounting functions are being revolutionized.
Since growth is a priority for property managers, the new tech products serve to let them be much more efficient.
What About Tenants?
While tech is dominating, less face to face time is being spent with tenants. For property managers to keep tenants happy and give them what they want, they’ll need to find ways to personalize service. Oddly enough, they’ll be looking for tech to improve tenant relations too.
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