At Sweyer Property Management, we are often asked how the rental market is doing around Wilmington, North Carolina. When I’m asked that question, I always consider three factors. The first factor is occupancy; how many units are available to rent or actually rented? Then, I consider the rental rate trend; are rates typically going up or going down? The final factor is to consider how the inventory is growing in the marketplace. Today, we’ll talk about how those things are looking here in southeastern North Carolina.
Occupancy
We are at an all time high when it comes to occupancy, sitting at around 97 percent. The normal trend is 92 to 94 percent, so you can see there is not much inventory left in our current rental market. When there’s not much inventory, rental prices are affected in dramatic ways.
Rental Rates
Rental prices are increasing. They have typically gone up three to five percent over last couple of years. As we trended through the housing recession, there were far more people renting homes than buying homes. That has eaten up a lot of the supply, so rental prices have done quite well. We expect they will continue to trend upward in the coming year.
Inventory
When we talk about the number of new properties that are coming on the market, the trend for single family properties is actually going the other way. Many people have held onto their rental properties throughout the downturn and they are now finally feeling comfortable enough to sell those homes. That has taken some properties off of the rental market as they transition into the sales market.
Inventory has crested and is trending downward while prices continue to rise. If you own rental property right now, you’re in the middle of the perfect storm. You have high occupancy rates and rental rates trending up, so the market is going in a positive direction and your competition is less. This is also a good time to buy rental homes since this area can clearly use a little more inventory. Almost anything will rent right now.
There is some new construction in the multi-family market. That’s typically a different client. Usually, those multi-family units provide a starter opportunity for people coming out of college or just getting their lives going. We often pick them up in their next phase of life.
These are the three factors we consider when talking about the strength of the rental market. If you have any questions, or you’d like to hear more, please contact us at Sweyer Property Management.