Millennials and renting.

Grant Cardone Talks about his theory on Millenials.

 

with today’s ever changing business landscape we see a big need for apartments in the cities with the most growth. Millennials are opting in for a rental space rather than wanting to purchase a home like their baby boomer parents did back in the day. They want to be able to move freely amongst the cities with the best jobs. They don’t like owning things and being able to rent almost anything and everything now days is perfect for them. The housing situation is no different. We have seen a huge growth in millennial apartment complex occupation. One person we interviewed, Jonny, said that “it’s the perfect situation for me.” “I have school and I will be entering the job market soon and I will need to get an apartment in the town I find a job. I love the freedom to jump ship and be able to go wherever I want in a short amount of time and not have to move a whole lot in transition. I rent my furniture and appliances. I have to be careful in this new economy and not get strapped down to a home with a mortgage.” With rents and availability of new product on the market, it’s an amazing time for millennials to be able to be nimble and act on that new job offering and make the cut with speed instead of trying to sell a home and relocate. The times have changed and we see it every year now. Apartment complex owners are steadily trying to keep up with the demand by building new apartments in the hottest markets right now. With the new elections coming up we are anxious to see what will happen.

The next real estate crisis

“The next major bust , 18 years after the 1990 downturn, will be around the year 2008, if there is no major interruption such as a global war, and we hope there is not.” Jon smith Epperson

The wave of destruction that washed across the US economy in 2008 caught the world completely by surprise. The phrase so often used to describe it, a “Catastrophic financial tsunami,” reinforces the popular belief that the disaster arose suddenly and swiftly.

In the real estate world the build up to the Great Recession could be clearly tracked with metrics available at the time from sources that had viable date to uphold their theory, and its timing predicted with a stunning degree of accuracy due to prior recessions and long before the phrase “collateralized debt obligation of ” entered the lexicon.

The first phase of the real estate cycle and what it means.

Phase I: recovery

We clearly understand the characteristics of a recession: high unemployment; decreased consumption of goods; and decreased company investment in structures, production plants, and equipment. The price of land, essential for economic activity, is at its lowest point in the downward cycle.

As the population increases so does the demand for services and goods. This the chance of expansion is halted by government intervention in the form of lowered interest rates (the #1 key ingredient for investments).

With the increase in demand and lower investment cost, business’ expand their market territory. They hire more associates, build new production plants, and buy more equipment. The great expansion adds to the demand for land (structures) on which the economic boo can take place.

Vacancy across all real estate asset classes (office, retail, residential, etc.) decreases as companies use previously empty buildings and individuals move into previously vacant homes. The situation becomes more favorable for the economy as a whole.

Will we see another recession, I’m sure. They economy will is in a swing as we speak. listen to what our good friend over at Cardone Acquisitions has to say about the real estate scene right now and what’s to come.

Well guys I hope that gave you some useful insight. I will catch you next time.

Paul