Did someone say higher rents? Good news for Landlords?

If you are a landlord, this economic downturn has produced one very positive result; decreased multifamily construction activity. As hard as it may be to find quality renters right now, imagine if new developments were still popping up around us like they were just two years ago. As this latest article from Multifamilybiz.com points out, multifamily construction has been hammered by the credit crunch.
David Crowe, the chief economist with the National Association of Home Builders says, "The vacancy rate for apartments is elevated now, but as the economy recovers and jobs return, the people who've been doubling up with relatives and friends will want a place of there own- and there may not be one."
This may upset developers who want to stay ahead of demand, but current landlords should be cheering this development as a potential source of improvement. Some industry experts with the NAHB expect rental demand to surpass current supply by mid-2011, with increasing shortages continuing through 2014. They believe this could push rents up as much as 10% in the next two years and more than 4% per year through 2015.

Another Wave of Foreclosures

Get out your arc, there is another flood of foreclosures getting ready to hit the market. As reported in an article from HousingWire.com, there are an estimated 2.4 million foreclosures in shadow inventory that could reach the market this year and more than 1.5 million that were ready to be listed as of December 2009. These sources estimate prices could decline another 10% as a result.

It is certainly hard to imagine the real estate market stabilizing with this magnitude of foreclosures on the market. Even if there is an adequate supply of buyers (I do not think there is) to jump on these "deals," many of these properties do not qualify for traditional financing because of their condition. As a result, cash investors could be the final purchasers at even deeper discounts.

On the positive side, these properties have to be flushed out of the inventory at some point. In my opionion, the sooner that happens, the sooner the market will find the bottom. And, once we find the bottom, we can start working towards improvement.

Blackberry Maker Will Open an Office in Triangle

According to the News and Observer today, Research in Motion (RIM) confirmed plans to open a research and development office in the Triangle. The company already held a job fair in the area and has started hiring. This is a big win for the local economy that has a tremendous supply of high-tech workers.

Details about the location of the office and the number of employees have not been released.