👋 Join us for a special webinar Thursday, January 11th
Learn More

6 Economic Trends Every Real Estate Professional Should Know

ethan-lieber-latchel-ceo
Ethan Lieber
•
July 3, 2018
6 Economic Trends Every Real Estate Professional Should Know

What are the latest economic trends affecting the real estate industry? These trends can seriously affect your decisions to invest more or to switch to cash reserves.

6 Economic Trends Every Real Estate Professional Should Know

How well do you know the current economic climate and trends? Do you have the latest data? We do.

1. Housing Prices Are Up 7.1% Over Last Year

The fine Bill McBride at CalculatedRisk compiles incredibly valuable statistics on the housing market and is well ahead of the curve when it comes to the housing market. This data comes from CoreLogic and their most recent data (May). Going forward, they expect a 5.1% increase year over year through next May. Bill notes that this increase has been in the 5% – 7% range over the last 3 years and that year over year price increases has been positive every month since February 2012. That is quite a long run of positive growth. Will it continue? Read on to learn more.

2. Construction Spending Is Up 0.4%

Private residential spending has been increasing steadily, but the growth rate still remains well below the peak during the last housing bubble. Note that the graph below is not inflation adjusted, so there is still quite a bit more growth room available before reaching the previous peak.

6 Economic Trends Every Real Estate Professional Should Know
Source: CalculatedRisk

3. Housing Construction Material Costs Are Up Sharply — Are These Two Related?

Both spot prices and futures on framing lumber, a critical component of housing construction materials, are up sharply and well above bubble peaks. This is certainly due to tariffs being imposed on lumber, steel, and other materials being imported into the US and will increase construction costs. These costs will slow down the construction industry and potentially less supply will come into the market, which may further motivate housing price increases. The data came from NAHB.

4. Personal Income and Spending Are On The Rise

CalculatedRisk also summarizes information from the Bureau of Economic Analysis. Personal income increased 0.4% in May, and spending increased only 0.2%. This is growth at a good pace, but below economists overall expectations. As a result, estimates for overall economic growth in Q2 are being revised downward. However, overall trends indicate Americans are earning more and more and also spending more and more, so this suggests strong consumer confidence.

5. Mortgage Delinquency is Still Falling

Yet another summary of data from CalculatedRisk. This time the data comes from FannieMae. Single Family Serious Delinquency (meaning 3 months or more past due or in foreclosure) is down to only 1.03%. The recent uptick was largely due to hurricanes. The downward trend seems like it will continue as long as income is increasing, which the news above, suggests it will!

What will slow down the increase in housing prices?

6 Economic Trends Every Real Estate Professional Should Know
Source: CalculatedRisk

6. US Inflation Reaches 6-Year High

Inflation rose to 2% in May, which is its highest level since April 2012. Now, 2% is the Federal Reserve’s “inflation target” however, for many years, the Federal Reserve has treated their target more like a cap. Hopefully the Fed doesn’t increase interest rates too quickly, which would quash inflation and also slow down the growth in housing prices. Source: Wall Street Journal.

Share this
Related Posts

See why property managers love using Latchel

Unlock the Potential of Digital Insurance
Launch a tailored renter's insurance program

Sure provides tailored renter’s insurance that enables property managers, owners, and residents to protect their property, minimize risk, and experience the peace of mind that comes with the protection of your assets and business.

Most leases require renters insurance. So, we’ve partnered with Sure to provide that option for your residents. While residents aren’t required to use Sure to meet the renter’s insurance requirement, this is still a convenient option you can offer to your tenants. 

All services and products are provided by Sure, not Latchel subject to Sure’s terms and conditions.

Property Inspection Platform
Automate and Organize Inspections with RentCheck
check-mark-icon

Make Inspections Easier
RentCheck saves time by enabling residents to complete inspections on their own. Customization and automation ensure the job gets done.

check-mark-icon

Stop Wasting Time
Schedule inspections for all stages of the lease cycle at any cadence you choose. RentCheck handles the reminders.

check-mark-icon

Instantly Submit Work Orders
Take advantage of Latchel's integration with RentCheck to instantly submit a work order for any maintenance issues that pop up on an inspection.

check-mark-icon

Modernize Your Process
Easily compare new and existing inspection reports, side-by-side, and avoid security deposit disputes.

check-mark-icon

Prompt Routine Filter Changes and Resident Tasks
Schedule resident reminders to replace filters and other upkeep tasks over the course of the lease lifecycle.

To learn more about RentCheck, talk with a Latchel benefits expert today. All services and products are provided by RentCheck, not Latchel, and subject to RentCheck’s terms and conditions.

Affordable Pest Control

Access world class pest control for a fraction of the normal price. No need for new software or a complicated setup.

check-mark-icon

Easy Pest Control
Residents simply reach out to Cover Pest if there is a pest issue, and Cover Pest takes it from there.

check-mark-icon

Clarity on Who Pays the Bill
No more awkward conversations about who is responsible for the bill! With Cover Pest as a resident benefit, residents get pest control for covered pests without an additional cost.

check-mark-icon

Vendor Sourcing
No more sourcing for vendors! Cover Pest will source and coordinate with vendors for each pest control request

To learn more about Cover Pest, talk to a Latchel benefits specialist today.  All services and products are provided by Cover Pest, not Latchel, and subject to Cover Pest’s terms and conditions.

Air Filter Delivery Subscription

FilterTime is an air filter delivery service that makes it easy and convenient for residents to replace their air filters. FilterTime customers can protect their HVAC system, reduce dust and pollen, save money on energy costs, and more by leveraging this delivery service.

check-mark-icon

Reduce Labor for HVAC Issues
Filter delivery service results in a 38% reduction of total HVAC ticket requests.

check-mark-icon

Cost Savings on HVAC Repairs
Average HVAC repair costs have increased by 48.7% year over year. an air filter delivery subscription can cut costs up to $250-300 per property per year.

check-mark-icon

Energy Reduction
Filter delivery is saving residents $14.82 per month in energy costs.

How it works:

Choose from almost every size and type of air filter including custom-made sizes

Choose how often you want your filters delivered

smile-icon

 A box of brand new air filters delivered to your resident’s front door

To learn more about FilterTime, talk with a Latchel benefits specialist today. All services and products are provided by FilterTime, not Latchel subject to FilterTime’s terms and conditions.

Boost resident satisfaction and drive good resident behavior through a rewards, incentives, and credit building program
check-mark-icon

Drive On-Time Rent Payments
Piñata rewards renters for on-time rent payments through Piñata cash, and boosts renter's credit scores for online payments.

check-mark-icon

Boost Resident Satisfaction
$30 gift card to use at select brands and businesses, $25 restaurant card, 720 annual Piñata Cash to use on rewards, Early lease renewal gift.

check-mark-icon

Attract and Retain Renters
2 out of 3 renters prefer properties with rent reporting. Plus, residents get incentives for early lease renewals.

check-mark-icon

Rewards Residents Love
Residents can use Piñata Cash on brands they know and love, such as: Starbucks, Amazon, Sephora, Lego, Target, Walmart, Home Depot, Lowes, Doordash, Best Buy, and many more!

Piñata Cash

Residents easily earn Piñata Cash any day of the month by doing things like taking surveys, referring friends, or trying out new products.

Residents also get access to big-ticket giveaways, limited drops and super surges!

And, with exclusive access to our marketplace with over 300,000 deals, residents can squirrel away up to $4,500 annually.

To learn more about Piñata, talk with a member of our benefits team today. All services and products are provided by Piñata, not Latchel subject to Piñata’s terms and conditions.

Master Liability Insurance

Now you have one less thing to worry about with a Master Liability Policy through Obie.

check-mark-icon

Affordable Coverage
Affordable policies available with liability coverage starting at $100,000 and up to $300,000 to meet any property manager insurance requirements.

check-mark-icon

Stay 100% Compliant
Master policy provides $100,000 for management companies and owners by ensuring 100% of occupied homes and units are covered for property damage liability issues relating to resident negligence.

check-mark-icon

Peace of Mind
Liability coverages include perils such as fire, smoke, water, explosion, overflow of sewer, and many others that provide coverage for damages you (the resident) may cause to your unit or home

check-mark-icon

Personal Liability
Personal liability coverage is automatically include to protect you against claims where you may be considered legally liable. (Bodily injury claims, dog bite claims, and more)

check-mark-icon

Additional Coverages
Additional/expanded coverages are also available. (Pet damage, identity fraud, theft/vandalism, and more are available!)

All services and products are provided through Obie and are subject to Obie’s terms and conditions.

👋 Join us for a special webinar Thursday, January 11th