The crux of it is, while some major metros rely heavily on one major industry – auto manufacturing in Detroit, leisure and hospitality in Orlando, oil in Houston, et cetera – Dallas’ job market is robust on multiple fronts, making labor an especially stout pillar of the local economy.
All recessions are different and stem from different underlying causes. As a result, the impact of a recession on CRE varies according to the cause, duration and severity of the downturn.
Within the past year, eye-popping home prices and a rapidly increasing mortgage rate have shut more and more people out of the homebuying market within the past several months, pushing more people to rent for longer.
The impact of the 2 percentage point hike between late December of 2021 and mid-April of 2022 was equivalent to a breathtaking 27% jump in the cost of buying a home, per the Harvard housing study.
The #1 location for population growth was Georgetown, Texas, located within the high-growth Austin metro – one of CONTI Capital’s target markets for multifamily asset acquisitions.
This higher ratio value is fueled by a tight labor market, causing the demand for labor to press upward on the demand for housing. This is true in all the major metropolitan areas that CONTI tracks.
Based on this data and further breakdowns by our experts, CONTI believes that the multifamily market harbors strong fundamentals, and vacancy rates will remain low relative to historical norms despite a swell of expected construction deliveries.
First-time homebuyers who might have been able to secure a mortgage with little trouble a decade ago are facing increasingly difficult odds today.
Recently, the median home price in the U.S. reached a historic high of $379,700. Single-family home prices have been climbing drastically and this increasing lack of affordability has only accentuated the barriers to homeownership.
CONTI’s own home price forecast is forecasting 3 and 5-Year annual average home price growth to average 8.2% and 6.1%, respectively. Our 5-Year forecast is higher than the mean but lower than the optimistic growth recorded by the survey.
