Free! Guaranteed! Real Estate Apartment Market Will Always Go Up! (Except of Course, When it Goes Down or Sideways!)
The 4th Quarter of 2018’s apartment market can be summed up in one word, uncertainty. Not knowing where government providing no clear vision of the future, created an uncertain market. The fundamental were good. Job growth near 300% of the national average is the headliner. Interestingly, taxable sales year-over-year rose a pale 1.7%, just on pace year-over-year in Washoe County but up in Clark county. Average apartment rents went against current trends and were down the 4th quarter just $27 and vacancy rates were up close to 1%. Newer apartment units under construction are around 3,400 new units which may fuel the downward trend in rents and the upward trend in vacancies. The number of apartment sales and developmental land sales slowed in the 4th quarter.
Where do we go from here? Reno used to be an isolated market. In the past 15 years this has reversed itself. We are now on the map with buyers from California to New York calling me with interest. UNR and Tesla, plus countless others have also put us on the map as a business-friendly growth market. Nationally, some feeder markets (Seattle being a good Because we are now connected to the national market this puts a downward Our economic fundamentals are good but there are many variables outside of our market that directly affect us that we have no control over.
What I have seen in the market... Recently, properties that have gone vacant are taking months to lease instead of just days. Obviously, there is some seasonal factors to this, but still, this seems like a strong shift. National developers that were previously eager to do projects in Reno are pulling in their reins, not necessarily because of the Washoe County market but because of the national market uncertainty. I see less inventory for sale; sellers are sitting on the sidelines, not sure if it is time to sell because they have seen large increases in lease rates. I believe we will not see the large increases in lease rates going into the future because the rate of increase far out-stripped the increase in wages. I think , vacancy range and property values will go sideways for a while.
Predicting the real estate market with as many variables as there are is a risky bet. I just hope I am more accurate than the weatherman!