Property Management Blog

Real Estate Market Trends: Insights and Predictions for Future Investments

Ally Trygar - Thursday, December 7, 2023
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As a real estate investor, your success and profitability depend on being aware of the latest market trends. Hopefully, you’ve established some investment goals and strategies that are keeping you on track, and you’ll need to continually evaluate those as market trends change and you gather more data to help you predict what might be coming next. Understanding market performance will allow you to make smart investment decisions now and in the future. 

Knowing the current and future direction of the real estate market can give you an edge when it comes to choosing properties to invest in. This knowledge can help you improve the value and condition of your existing assets. You’ll have a better idea of where price points are landing and how you’ll be able to remain competitive when you’re looking for the best-qualified residents. 

As San Diego property managers, we work with investors on all of the logistical things that go into leasing, managing, and maintaining an investment property. But, we do more than that. We also share the information we gather on the market and the latest insights and analytics. This information is valuable to our investors because it allows us to strategize and position your investment properties within the changing market. 

Let’s take a closer look at real estate market trends that we’re seeing right now. This information will give you insights and predictions that will help guide your investment strategy.

Rental Rates are Higher than Ever 

You have likely noticed that the rental value on your investment property has increased over the last couple of years. Even if you’re restricted in how you raise the rent by stabilization laws in California, you’re still earning a lot more every month than you were even a year ago. 

That’s good news, of course, but it’s also putting some stress on residents. With inflation and rising costs across the board, higher rents are not exactly easy for them to absorb. You may have lost residents recently or found yourself dealing with a higher number of vacancies and turnovers. 

The pool of residents looking for well-maintained and well-located rental homes remains strong, however, especially in San Diego. We have the benefit of a strong and diverse local economy. We’re attracting members of the military and their families, students and staff and professors from our local universities and colleges. We have retirees looking for low-maintenance investment homes and residents with children who need good school districts. 

The San Diego rental market is always competitive. Even with rising rental rates, you’ll be able to attract well-qualified residents - especially if you’re offering an attractive property. 

Diverse Demands for Single-Family and Multi-Family Rentals

It’s difficult to say whether single-family homes are in more demand or multi-family properties. 

That’s because the resident pool is so diverse and their needs are, too.

One group of residents prefer single-family homes because they’re looking for the space and privacy these types of homes can provide. These may be people who are interested in owning homes in the near future, but the current sales market and the high interest rates are making mortgages too expensive, so they’re renting a bit longer. 

The high rental prices we mentioned earlier are keeping another group of residents more interested in multi-family properties. They want apartments or condos because the rent is traditionally lower on these types of properties. They may be moving in with roommates or they want the amenities that a building or a community can provide, such as a pool or a fitness center. 

What this means for you is that either investment type will be a money-maker. You’ll attract residents whether you’re renting out units in a small apartment building or a single-family home in a new construction HOA community.

Increasing Demand for Work-From-Home Spaces

Remote work was not a passing trend that showed up during the worst of the pandemic. It has transitioned into a normalized working culture for many people. While some companies have been adamant about their employees returning to the office, most have found that those employees who prefer to work from home are more productive and accountable when they’re not forced to come into the office. 

A large population of work-from-home residents are looking for rental homes that understand their needs. As a result, there is increasing demand for San Diego rental homes that have dedicated work-from-home spaces. This could mean a small den or an extra bedroom. It could be a loft that makes sense as a home office. Even an open floor plan with plenty of room for a desk and other office equipment can be marketed as a dedicated work space. 

As a real estate investor, you’ll want to consider buying up properties with home office space or the potential to create a home office in the future. Think about this particular resident population when you invest.

The Rise of Technology in Real Estate

Real estate and property management technology has come a long way over the last decade, and it’s transforming the industry. This matters to you as an investor for a few reasons: 

  • Technology can be leveraged to make the leasing, management, and maintenance process far more efficient. Use virtual tours and 3D images in your listing. Set up self-showings for residents who want to see a property when you’re not available. Collect rent online and create digital inspection reports. 

  • Accounting reports and financial statements are more accurate, detailed, and transparent. With the right software or app, you hardly have to do anything to understand your ongoing income and expenses

  • Residents are looking for better technology when they rent homes. Consider energy-efficient appliances, video doorbells, and other smart home tech to make your property more attractive and competitive on the market. 

If you’re working with a San Diego property management company, you’ll want to be sure they’re investing in innovative technology that will help you have a better, and more profitable investment experience. 

Real Estate TechnologyReal estate investing can be a smart way to build wealth over the long term, so it's important to always stay aware of the latest trends and predictions. San Diego property management can help investors like you understand how to best position yourself in a shifting market. Contact us at PURE Property Management, and we’ll help you do better.

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