The Economics of Rental Real Estate
Here are some facts about the investment real estate market that you might find interesting:
* Rent payments have remained steady, according to the National Multifamily Housing Council in a study of 11.5 million apartments.
* Home sales are expected to drop considerably during the remainder of 2020, and are not expected to pick up until the second quarter of 2021. This coincides with projections about the unemployment rate.
* Commercial real estate prices are projected to fall by 7%.
* Total returns from unleveraged core real estate are expected to fall to -5% this year, but are also expected to rise to 3.1% in 2021 and then to 6.7% in 2022.
* The industrial sector is expected to lead in rent growth between 2020 and 2022, averaging 2.2% per year.
* Apartment growth is expected to fall by 2% in 2020, but see a positive trend (of 1%) through 2022.
* Hotels are expected to be hit hardest, with the average occupancy rate falling to 40% this year.