2017 Outlook for Property Managers in Fort Worth

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The year 2016 proved to be a great one for property management. Fort Worth rental property owners saw rent rates continue to rise bringing in more income for their business. New construction continues to grow throughout the Metroplex. And, the relocation of many national companies to Texas brought new renters to the area. Specialized provides quarterly and annual economic outlooks to help rental property owners know what is on the horizon for their investments. Here is our 2017 outlook and how it could affect rental owners in Fort Worth.

Rent Rates

In 2016, the 4.8 percent year-over-year rental rate increase proved to surpass the 1.6 percent rate of inflation, with a typical three-bedroom single family home renting for $1459 on average. In 2017, these rates are expected to continue to rise making the same unit rent for over $1500. Even if the rate of inflation rises to over 2 percent, it will still lag behind the rental rate market.

Vacancy Rates

The rise of rental rates is beginning to stabilize demand which is predicted to keep vacancy rates in the low 5 percent range. Property managers in Fort Worth may experience a slightly lower vacancy rate. The end of Q316 showed the area with closer to 4%.

Mortgage Rates

The Federal Reserve announced an increase to the Federal Funds Rate meaning that 3% mortgage rates will be no more. We expect these rates to be closer to the 4% range in 2017.

Foreclosures

Currently at a record low since August of 2007, foreclosure rates are projected to remain low making it a challenge for property managers in Fort Worth to find a deal.

Housing Prices

Along with rental rates, housing prices are also on the rise with a national increase of 5.39% through September of 2016. While they have not yet returned to their peak prices of 2007, they are expected to continue to grow. However, with mortgage rates on the rise, homeowners will be hesitant to sell their existing homes to move to new ones as the cost will be more. This will limit the supply of current homes for sale.

While these predictions are mostly positive for property managers in Fort Worth, investors who are seeking to purchase new property may be faced with more of a challenge. No matter where you are in your journey as a property manager, our Specialized Property Management Fort Worth team can help you achieve your goals. Contact us today!

Fort Worth Property Management Teams’ 2016 Year in Review

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Each year Specialized makes predictions for what the year has in store for property managers according to the economic trends. While many predictions made in January are often forgotten by December, our Fort Worth property management team decided to take a look at the 2016 predictions to see how many of them were correct.

2016 Prediction #1: Investors will see shrinking opportunity for profitable rental properties.

This prediction proves to be mostly right as the supply of homes dropped to 4.6 months from the previous year’s 5.7 months, and the number of existing homes grew only slightly in 2016. With foreclosure inventories down to approximately 340,000 nationwide, the opportunities for investors to find new opportunities was a bit lower than in previous years.

2016 Prediction #2: Millennials will Begin to Form New Households

In January 2016, it was predicted that this was the year for Millennials to start to move out from their parent’s homes and begin forming their own households mostly in rental units. However, through September of 2016, only 1.16 million households were created as opposed to the 1.91 million in the same period of 2015. Homeownership also fell to a national low of 63.5% throughout the year.

2016 Prediction #3: Vacancy rates Will Stabilize or Slightly Drop

At the beginning of the year, the national vacancy rate was 5.2 percent for a three bedroom single family rental home. According to RentRange, this prediction was correct as vacancy rates fell from 5.4% Q315 to 5.2% Q416.

2016 Prediction #4: Rental Rates Will Outpace Inflation

At the end of Q316, an average three bedroom single family home was renting for $1,459 which represents a 4.8% increase over the previous end of year national rent rate average of $1,393. Though the consumer price index was up to 1.6% in October 2016, it was not up enough to outpace the rise in rent rates, making this prediction also true.

Fort Worth property management companies benefitted from these predictions as the local market continued to grow. Our local property managers Ft. Worth team is available to help you understand the market and look forward to the coming year to get the most out of your investment. Contact Specialized today!