Specialized Property Management makes predictions for how the coming year will treat rental property owners. Often when a prediction is made for a year, it is forgotten about by the end of that year, but this year we want to look at our predictions for 2016 and see how many of them were correct. Plano property managers might benefit from our forecasts for 2017 while making wise investment choices in 2017.
Here is what we foresaw in 2016.
2016 Prediction #1
Specialized Property Management predicted the number of profitable rental properties would shrink for investors. In January 2016 when this prediction was made, the supply of existing homes was 5.7 months, the supply of single-family homes was 5.2 months, and the number of foreclosures was at 470,000. We also predicted that this number would fall.
Throughout 2016, the supply of homes for sale dropped to 4.6 months, while foreclosures fell to 340,000 properties in inventories. These numbers show our prediction was pretty accurate.
2016 Prediction #2:
We also predicted that Millennials would begin to move out of their parent’s houses and form their own households most of which would be rentals. This prediction proved untrue as household formation in 2015 significantly outpaced 2016. As of September, the number of households formed was 1.16 million as compared to 1.91 million in 2015.
2016 Prediction #3:
We looked at vacancy rates and predicted they would stabilize for 2016. According to the census bureau, housing vacancies fell from 7.3% in Q315 to 6.8% in Q316 proving our prediction to be accurate once again.
2016 Prediction #4:
Our last prediction dealt with rising rental rates nationwide. This prediction also proved correct as the average rental price on a three-bedroom home rose from $1353 in December in 2015 to $1459 at the end of Q316. The rising rental rates proved to outpace inflation at the end of Q316.
Specialized Property Management offers these predictions at the beginning of each year to help investors get a better idea of what to expect throughout the year. Whether we are correct or a little off, Plano property managers still benefit from knowing what the year could have in store.