Hessam Nadji: Top US Residential Markets for 2015
Marcus & Millichap's Hessam Nadji sat down with Bloomberg's Erik Schatzker and Betty Liu on the set of "Street Smart" to discuss the top residential markets for 2015. The dominant theme: tremendous rent growth.
There's been a structural change over the past few years where housing recoveries are usually fueled by first-time home buyers leaving the rental market, according to Nadji. Now we're seeing a shift in lifestyle as the young and old prefer renting.
In 2014, U.S. renters paid $441B in rent, a $20.6B increase from 2013. Markets like Denver, San Jose, San Francisco, Houston, Austin and Dallas haven't had a steady supply of new housing built in the last three to four years, yet they are experincing tremendous job growth, and should see rents rise in 2015.
Expect 2015 rent growth to continue in major metro areas, but at a slower pace than 2014. "We expect rent growth to continue," Nadji explains, "but given the tepid pace of the job growth on a national average, and the tepid pace of household income growth, we don't believe the type of double-digit rent growth we have seen is sustainable."