A recently released survey by Urban Land Institute shows that optimism levels among economists have dropped regarding the economy and the commercial housing industry.
The survey was conducted based on interviews with 39 real estate industry economists and analysts, and is the second in a new series that started in March. According to the report, respondents believe the economy continue to improve in most sectors, but considerably less dramatically than believed in the spring.
Perhaps most importantly for rental property management officials, the survey shows that analysts believe that the apartment market will cool in the near future. Rental property investment returns are expected to continue to drop from their high point of 18.2 percent in 2010. Returns for apartments are expected to be approximately 11.1 percent.
The survey also shows that analysts predict that vacancy rates will drop to just 4.7 percent this year and hold that low rate before rising slightly in 2014. Essentially, property managers should be capable of maintaining their current level of incoming rental applications for the next year or two, but might have a harder time in coming years.
Following this survey, a report was released by the Bureau of Economic Analysis showing that personal income had decreased slightly, potentially pointing to more renters, but the continued turnaround of the economy will eventually send potential home buyers back out into the market.