What That Means for Raleigh Investors and Landlords
Landlords around the country are scratching their heads about the current housing and rental market. Looking into the proverbial rearview mirror, we saw a thriving rental market throughout all of 2021 and early 2022, but now things look considerably different. This leads many to ask the question, what’s changed and how will that affect the Raleigh Market?
Evictions on the Rise
The rental rate bubble has gone up a staggering 24%, while the average hourly wage has increased by only 8%. The reality is that tenants are struggling to afford the rent and therefore evictions are going up each month— eviction rates go up, rental rates go down.
Eviction rates are rising across North Carolina, with nearly 15,000 evictions last month. That statistic is almost double the number filed in August 2021. With the looming recession and the increased cost of living (while wages are staying relatively stagnant) tenants have reached a saturation point. This development has led to an increased amount of defaults and evictions. These evictions are causing additional rental inventory on the market, which in return reduces the prices for the unit on a nationwide scale.
Data shows that the nationwide rent prices decreased during August. This is the first short-term dip of the year where both 1-Bedroom and 2-Bedroom apartments have seen a rent decrease of about $50 a month. So how did we end up in this predicament?
Raleigh Rental Market
Some believe we are entering Phase 2 of the Housing Market crash due to the distorted housing (and rental) market during the pandemic. While areas around the country are getting hit hard regarding rental changes, the Raleigh market is still relatively strong. However, some reports are showing that rental rates may have peaked. Could the rates go up over the next 24 months and leave some money on the table? Yes, that certainly could happen. But, are more factors pointing to a leveling off or reduction in rates? Yes, and that means times are changing.
What Should Landlords and Investors Do Now?
Safety, rather than risk with an element of long-term adaptability is the new motto for any landlord or investor.
- Adapt: With the uncertainty of the economy and the current national trends in the housing/rental market, it is imperative to think long-term. I.E— a good tenant at a rate everyone is good with wrapped up for as long as possible is optimal!
- Safety: The fact is people still need to live somewhere, no matter the recession status. The trouble is finding a tenant that can consistently pay rent to reduce the likelihood of eviction or frequent turnover. With the current economy, err on the side of caution when it comes to your tenants. Don’t take a risk that may end up hurting you in the long run.
Need Help with Your Rental Property?
At Oak City Properties, we’ve streamlined the experience of purchasing and owning investment properties through a trusted and reliable mindset built on decades of measured success. Our team of real estate and investment professionals is ready to help you manage your most significant assets through a hands-on approach that focuses on consistently generating results. Want to learn more about our commitment to effective real estate investing and property management? Give us a call at (919)-232-9222 or check out our website: www.oakcityproperties.com
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