Q1 NARPM Vacancy Survey Results
The rental market is strong! The few segments that were previously performing less favorably than the national market(Canyon County multi-family particularly) have nearly caught up with the rest of the market and we’re currently seeing some of the most impressive vacancy rates ever accompanied by rent increases.
April Rental Vacancy Rates and Renewals
April was closed out with a 1.3% vacancy rate and precisely 2/3 of all leases renewed. On average, we realized a 4.6% increase in rental rates for April – a trend I suspect may be even greater as we approach the prime time of the year. All properties were pre-leased before tenants even moved out!
An Unusual Market – Home Prices and Rental Rates
Real estate tends to have cycles. There tends to be an inverse relationship between increases in home sale prices and rental rates where often times as home sale prices are increasing at a very healthy pace, rental rates tend to increase much slower and vice-versa. Currently however, we’re seeing rental rates and home prices move in parallel with both increasing well above the inflation rate. Time will tell, but I would surmise that this unusual market behavior is a combination primarily due to the following: low housing inventory, improving employment, out-of-state money coming in, and a shift toward renting over ownership. Whether your rental investment strategy focuses on cashflow or appreciation, it would seem that the Boise market is shaping up to give us both! Although a trend now in its infancy, this could prove in time to be extremely beneficial to Boise property investors.
