SARE Feb 2023 Residential Real Estate Data Trends
Contents
In this month’s edition of SARE’s Residential Real Estate Data Trends, we see some reversion to the mean with some markets cooling down. But not everywhere! The stock market rebound is improving consumer confidence despite a decline in consumer spending. Single family homes are also seeing a rebound given slower rate hikes and new year seasonality.
Predicting Gentrification
A working paper (non-peer reviewed) from MIT took some time to predict which metros would grow the fastest based on historical data.
Method : Regularized Regression on Metro Level Census and Employment data.
Most important features for urban growth:
- Human Capital (% of Colleged Educated Population over 25)
- Transportation Data (Public transit flights, miles, & usage)
- Employment Data (Unemployment rate and number of people on payroll)
- Amenities (Libraries, Hospitals, Post Offices, green ratio)
Takeaways:
Momentum builds and they expect long term outperformance in the South Atlantic (Florida included, we’ve got spots still) and of course in Texas and Colorado.
Declining Residential Rents in Tech Cities
Zillow reported the first month over month fall we’ve seen in years, with expensive tech cities bearing the largest brunt.
- Raleigh (-1.3%),
- Austin (-1.2%),
- Seattle (-1.1%),
- San Jose (-1.1%)
- and New York City (-1.0%).
Not every metro is seeing rent declines as the midwest and Florida are maintaining growth (hope to see you guys on the trip).
- Louisville (0.7%)
- Memphis (0.6%)
- Buffalo (0.5%)
- Birmingham (0.4%)
- and Miami-SARE is hosting a Florida Trip! (0.4%)
Residential Rental Market Oversupply
Atlanta, Tampa, and Indianapolis are seeing massive multifamily supply coming online in the next two years. This will likely lead to downward pricing pressure on rents as new builds crop up in these cities.
Nelson is the founder of SARE (Subtle Asian Real Estate), a facebook community of almost 20,000 real estate investors with in-person meetups all over the country. Nelson is an investor and syndicator himself, and a real estate data consultant on the side.
