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Identifying Ideal Markets growth opportunities for housing investors. Each ranks in the top 10 in terms of economic growth, job growth, high-paying median salaries, attrac- tiveness of state and municipal tax regimes, corporate growth and attrac- tiveness to do business.
O ur big data research and statistical analysis provides insights that lead us to metros across the U.S. that show: • Optimal employment and wage growth, • Stability and diversity of economic drivers, • Outstanding affordability indices and • Excellent quality of life, including good transportation hubs, retail, en-
tertainment, schools and hospitals. We also analyze population age, lo- cation density, price to income, price to rent and vacancy rates. While we con- tinue to track market data and current opinion, we are always analyzing data to forecast the “U.S. cities of the future.” We currently focus on four metros: Dallas and Houston, Texas; Charlotte, North Carolina; and Orlando, Florida. Each one offers continued, long-term
Each metro has received accolades and high ranking scores for quality of life, schools and education, cost of living, weather, health care, accessibility and transportation networks. And each has demonstrated bright prospects for future growth and expansion. All these metros have scored higher than average growth in home price appreciation and rent appreciation. •
percent to 67 percent. Since 2008, that level has dropped to approximately 62 percent and remains there, meaning that the profile of ownership to “rentership” is profoundly changing. This is partly due to liquidity and partly due to demographics. Millennials are burdened not only by a high rent-to-disposable-income ratio but also by burgeoning student debt. That means that for that demographic, renting will continue to remain the preferred— and indeed, in some cases, the only—op- tion when it comes to housing. Are We Moving More Toward a Renter Society? This has translated into a significant in-
crease in the proportion of newly formed households that choose to rent versus buy. Between 1995 and 2005, there was very little change in the number of people who wanted to rent. But since property values peaked the last time in 2006, that number has shot up and now stands at 26 percent, more than those who choose to purchase. Today a typical first-time buyer will rent almost 2.5 times longer, is almost two years older and has to spend almost 40 percent more with roughly about the same money. Also, Millennial households are typically averaging two rather than three people, indicating that they are deferring having babies until well into their 30s. Meanwhile, it is noteworthy that those
who do choose to rent have elected to rent single-family residences in ev- er-increasing proportion, up from 14.2 percent in 2004 to 19.8 percent in 2014. Over the next decade there is project- ed to be a 5.5 million deficit of for-sale homes compared to demand. Between 2005 and 2014, only 2.2 million rentals were completed—the lowest 10-year rate in decades—at a time when de- mand has surged by 7.9 million renters. Housing demand of any kind will steadily grow. In light of the previous, demand for U.S. rentals will continue to grow as for-sale housing production falls short of need year-over-year for the foreseeable future. •
10 | Greystone Residential
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