My predictions for Rentals in the Albuquerque Metro Area Housing Market in 2016
The Metro Area was slow to decline from the housing bubble burst of 2008 and as is our usual trend we have been equally slow to recover. The Metro Area finally saw the turn around in the housing market during the second quarter of last year. This affordability will create economic growth and housing demand. According to a January 5th article by Sal Christ, ABF’s business reporter, the average price of $175,000 with a 5% down made it 33 percent more affordable to buy than to rent the Metro Area last year. According to a recent survey in the Wall Street Journal the greater Metro Area ranks as one of the 20 most affordable cities of more than a million residents in the country.
I see rents continuing to be strong in the Metro Area. We will not see average rents going up as fast as in the past few years or vacancy rates as low but overall we will remain in a Landlord Market. The Post Millennials (or generation Z) are becoming adults everyday now and are more apt to move into their own place sooner than the millennials. Interest rates have started to go up and the constraints on financing a new home are much tighter than before 2008. They remember the effects of the housing bust. I predict they they will continue to rent for several years before taking the plunge into a mortgage commitment. This will keep the Metro Area rental market strong until 2018. After 2018 I believe the demographic will change. Without a crystal ball I have prudently decided another year to make predictions for 2008.
My next post will address my predictions for the Metro Real Estate sales market.