If we've said it once...

Hey folks, T. Furlow here. I guess it's time I jump into this blog thing, too. Here are some thoughts about the market:

We have said it before and we will say it again, "rents are going up." While the forecast has been positive for investors in the Triangle area over the past year, the numbers suggest the rental market has actually begun to emerge from its slump. This isn't some claim that everyone is getting rich quick; after all, investing in apartments will always be a long-term game. However, in your average neighborhoods, rents that were in the mid $600's just a few months ago are now turning over for tenants willing to pay $700/month.

This income increase can be attributed to the declining vacancy rates that have fallen below 8%. In fact, a local owner-operator we work closely with sent over 100 rent increase letters out to his tenants last month once he realized he had less than 1% vacancy in over 800 units. Not only are vacancies going down and rents going up but this movement is coming with a higher caliber tenant wanting (or needing) to rent.

With mortgage rates gradually climbing and even spiking over the last few weeks, people who were qualified to buy homes just six months ago are now being forced to rent just a little bit longer. This means higher income families are renting and the overall supply of renters in the area is increasing. We all know the law of supply and demand in a free marketplace and right now it is playing into the hands of investors. Who said you never use what you learned in school.

Don't believe us? Well, you might take some direction from Crosland, one the areas largest developers who planned to break ground on a downtown condo project in the coming months. However, just last week they announced they were refunding over 80 deposits and shifting the project to high-end apartments. So, if you have been thinking about investing in multi-family, you might want to think hard about jumping in now.

You can read more about the Crosland decision here. Or here in case that one doesn't work.