This May Be It for the Luxury Rental Boom

This May Be It for the Luxury Rental Boom

A seven-year boom in the high-end apartment sector may be nearing an end. Landlords of luxury rental properties likely will need to cut rents and offer concessions as supply starts to outstrip demand across the country, The Wall Street Journal reports.

Landlords reportedly in New York already are offering up to three months of free rent on some developments. In Los Angeles, some landlords are offering six months of free parking. In Houston, landlords are reportedly even waving the security deposit on some rentals.

“This will be a very challenged leasing environment almost everywhere,” says Jay Parsons, MPF Research vice president.

Apartment rents have jumped more than 26 percent since early 2010. The growth has outstripped inflation and income growth. In 2016, rents showed a slowing of increases. Rents rose by 3.8 percent. That is down from a 5.6 percent year-to-year growth in the third quarter of 2015, according to a report by MPF Research.

A flood of new apartments have hit the market in recent years, and most of those reflect developers’ focus on the high-end sector. The number of upscale apartments emerging on the market, however, is outpacing the number of renters, and that gap is expected to widen in 2017.

For example, the New York Area is expected to have nearly 30,000 new apartments enter its pipeline this year. That is double the historical average, according to Axiometrics. What’s more, about 85 percent of those new apartments are considered luxury. Dallas will see nearly 25,000 new apartments compared to its long-term average of about 9,000, while Los Angeles is expected to see more than double its historical average.

Source: “Luxury Apartment Boom Looks Set to Fizzle in 2017,” The Wall Street Journal (Jan. 2, 2017) [Log-in required.]

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5 Home Design Fads That Are Out in 2017

5 Home Design Fads That Are Out in 2017

Shiplap and white-on-white kitchens may finally be falling out of favor. The two trends have dominated home design in recent years, but realtor.com® says they’ll be fading fast in 2017. Here are some of the home design trends realtor.com® predicts will fall to the wayside in the new year.

1. Gray. Once the hottest color, gray is now looking gloomy. “It’s been overdone,” says Tanya Campbell of Denver-based Viridis Design Studio. “Diversity in the palette will strike a contrast. We may even see a transition from gray color palettes to warmer mochas and taupes.”
2. The glam look. This style’s signature is bold whites, bright silvers, and deep blacks, which have been popular in kitchen and bathroom designs. “We’re going to leave the glam era behind. That slick, stark, severe minimalism will be replaced with warmer elements,” says interior designer Bea Pila. “At the end of the day, we’re seeking a deeper comfort level in our personal spaces. That perfect showroom feel we were once into doesn’t make this possible.”
3. Shiplap. Shiplap surged to popularity as Joanna Gaines, host of HGTV’s “Fixer Upper,” turned to it as her go-to remodeling piece. But realtor.com® notes: “If you’ve ever wondered what 2016’s version of tacky wood paneling would be, look no further than this trend that seems to have overtaken TV design shows.” It’s difficult to remove, and designers now say it often makes little sense to use, particularly in a Colonial or Tudor home style.
4. White-on-white kitchens. White everything in the kitchen — from countertops to cabinetry and even the floor — is fading fast. “It’s just too much,” says Sara Chiarilli, a designer at Sarasota, Fla.-based Artful Conceptions. “This trend started to go in 2016, but you will find it completely gone in 2017.” That said, Chiarilli predicts that whites will stick around, but they will take on more depth and tones in kitchens in the new year.
5. Copper. Expect to see less of this heavy metal in 2017. Copper fixtures are another trend on the chopping block in the new year, realtor.com® notes.

Source: “10 Interior Design Trends That Are So Completely Over for 2017,” realtor.com® (Dec. 29, 2016)

10 States With Best Economic Prospects

10 States With Best Economic Prospects

North Dakota tops a list of states poised to have the healthiest economies in 2017, followed by Oklahoma and Texas. The list was compiled by business solutions site ExpertMarket.com, which culled data on housing, employment, and other trends in all 50 states. North Dakota had the highest growth in startup density of any other state, seeing an average increase of 5.56 percent in new business activity, according to the site. Its residents are also seeing the biggest growth in household incomes, with an average increase of 4.1 percent.

“There has been a huge surge in oil extraction in North Dakota, which has led to a steep rise in GDP growth and household income, which explains how they managed to take the top spot,” says Bobbi Brant, an ExpertMarket.com researcher who authored the site’s study.

States that topped the list represent those that have recovered from the recession the fastest and are continuing to see strong growth. “States that came out on top in our study have a bright future ahead of them, especially for 2017,” Brant says.

These are the 10 states that topped ExpertMarket.com’s list for strongest economic outlooks for 2017:

1. North Dakota
2. Oklahoma
3. Texas
4. Michigan
5. California
6. Montana
7. Ohio
8. Washington
9. Minnesota
10. Massachusetts

Source: “These Are the States with the Best Economic Prospects for 2017,” Fast Company (Nov. 30, 2016)

Older Kids Are Refusing to Flee the Nest

Older Kids Are Refusing to Flee the Nest

Nearly 40 percent of young Americans lived under the same roof with their parents or relatives in 2015. That is the largest percentage since 1940, Census data shows.

The share of young Americans ages 18 to 34 who are living with their parents or other family members has been increasing since 2005. Prior to the recession, about one in three young Americans were living with family.

Typically, as the economy improves, the number of younger Americans living with relatives declines. But that has not been the case in the latest economic cycle as millennials have largely stayed put.

In 1940, following the Great Depression, young Americans living with their parents reached a high of 40.9 percent. The percentage of young adults living with relatives then plunged to 24 percent in 1960.

The millennial generation is the largest in U.S. history and the housing market is anxiously awaiting their move in real estate.  But faced with rising rents and tough underwriting standards for credit may be blocking many younger Americans from venturing out on their own, real estate experts say.

The Harvard Joint Center for Housing Studies says that household formation is closely tied with housing affordability and income. Forty percent of young adults ages 25 to 34 with earnings of less than $25,000 headed their own household. For those who earn between $25,000 to $50,000, the percentage rises to 50 percent. Fifty-eight percent of young adults with incomes higher than $50,000 are heading up households.

Studies also show that younger Americans are delaying getting married and having children later in life than previous generations. That also may be preventing them from stepping out on their own.

Regardless, economists are optimistic. They are predicting that eventually millennials will leave their parents’ homes. Millennials are expected to more than double their current number of households through 2025.

Source: “Percentage of Americans Living With Parents Rises to 75-Year High,” The Wall Street Journal (Dec. 21, 2016) [Log-in required.]