Cameron Cowan | Knowledge Steward
RealtyTrac.com just released a study from ATTOM Data Solutions that looked at rental growth among single family homes in counties all over the nation and identified 25 counties where rental growth was happening in a big way. Here at RHAWA, we immediately zoomed in on the Pacific Northwest and looked around Washington to see how we were doing in rental growth and yields. In the past several years, rent prices have moved upward in a big way, especially in Seattle and the surrounding areas. Companies like Amazon, Microsoft, Google, and Boeing have been hiring in workers and relocating people to our area and that has caused demand and prices to move higher. However, the data indicates that prices and yields are starting to change. It will be interesting to see if this growth continues.
How are we doing?
This year, rental yields (rate of income return over cost, in other words, how much landlords are making) were down 4% in King county and throughout the Puget Sound region. Thurston County saw flat growth and Pierce County saw a moderate decline.
However, rental yield growth on single family homes has grown for our membership in Eastern Washington. Spokane, Kennewick-Richland, and Yakima all reported 7% or higher growth yields. This means that prices are moving upward and landlords are making more money. Now might be a time to review your rents and decide if the prices are still fair or if it's time to increase rates if you own rental property in Eastern Washington. Seattle did not fare so well and for single family homes was rated one of the worst for rental returns as growth yields fall due to stabilizing rent prices and the popularity of more dense multi-family buildings.
Another big take away from this study is the confirmation that, for most of the country, rent prices are topping out. Even in a country that is renting more and more, rent prices are leveling out. There are a variety of factors that go into that trend. One is the lack of growth in wages and the other is a lack of job growth in the greater economy.
Rental Yields Grow in Some Places
While yields rose in counties ranging from Pennsylvania to Colorado to Upstate New York, yields fell in 57% of counties all around the nation. This goes right along with the trend that rental prices would stay stable through 2017 and into the next year. There is great news for our members and friends in the Kennewick-Richland area as they made the list for the Top 10 Markets to Rent to Millennials in 2017. This is primarily due to a spike in Millennials moving to the area over the past 3 years. Other top counties included counties for Detroit, Jackson, Dallas, San Francisco and Atlanta. These were all places with sufficient data and a population of at least 25,000 people.
Want to dig into the data for yourself?
Hopefully our region will continue to attract young fresh faces who are ready to rent single family homes. If our region can keep up its economic growth then circumstances for our members who rent single family homes will continue to do well and perhaps reverse some of these trends that are in this data.
What do you think? Does any of this data match with your experiences? Let us know on Twitter or Facebook.