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.
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.
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%.
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.
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.
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!