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According to Axiometrics, a very good data provider for the apartment market, the national rent growth in 2012 will be 5.5%. Rent growth extended stay hotels nashville in 2012 will be supported by "strengthening during 2012 in C-class properties, which have lagged behind extended stay hotels nashville A- and B-class units the past few years".
Roughly speaking, A-class apartments are high-rent luxury units in better areas. Clientele are usually white collar workers and college educated kids. Demographically, these college educated kids belong to the large echo boomer cohort. Apartment loving real estate executives like to quote their kids, who tend to exit the suburbs for the "bright lights in the big cities" and their dating exchanges, as anecdotal evidence that the future looks bright in apartments But affluence is not a big segment of the echo boomer population and the fact that there are renters extended stay hotels nashville by choice suggests that their preferences might change when they get older. Everything has a beginning and an end.
B-class units are usually in older buildings. They are well maintained and located in socially acceptable neighborhoods. Rental rates are middle of the road. B-class renters tend to be middle-class extended stay hotels nashville based. They either rent by choice or by necessity. As they move up the economic scale, they either move to A-class apartments or flip to ownership.
C-class extended stay hotels nashville properties are older and built within the last 30 to 40 years. Their renters tend to be blue-collar or low- to moderate-income extended stay hotels nashville tenants. Rental rates are below the A- and B- apartment markets. Some of its renters are renters for life. Others are young individuals or families just starting out. As this population segment gets more established and better jobs, people tend to move up the apartment extended stay hotels nashville ladder or consider ownership. extended stay hotels nashville Currently tenure changes out of class- B and class- C apartments is constrained by lingering economic uncertainty and tight credit conditions in the mortgage market. Both conditions are likely to change.
The Axonometric data release is important because it shows that the occupancy gap between B- and C-class properties is shrinking. This suggests that a significant "healing" process in the C-class market is under way in regions, where the occupancy rate in C-class properties has reached a point where they can enjoy rather solid rent growth. In Orange County, for example, where the C-class extended stay hotels nashville occupancy rate was 95.7% lately; rent growth was 5% in January 2012 compared to the same month the year before.
The stirring in the C-class apartment market extended stay hotels nashville is economically significant because it means two things. extended stay hotels nashville First, foreclosed properties, extended stay hotels nashville which are the shadow extended stay hotels nashville supply for the rental markets, are getting easily rented out and a shortage seems to be emerging here, which forces working people into C-class apartments. Second, job growth has picked up lately in the nation and Orange County with growth in industry sectors that are benefitting the C-class population such as construction, leisure and hospitality, healthcare, administrative services, and manufacturing.
The C-class recovery could, therefore, be considered extended stay hotels nashville to be a moderately leading indicator pointing to a continued improvement in the nation's labor markets. But the real big issue in the apartment markets is if and when the "Big Flip" in tenure occurs from rental to ownership, particularly in the context of rising rents and sluggish home prices. The economic recovery will remove one of the constraints for this flip, at least for middle-class people, who will be kept from making that choice only because of tight credit conditions. But even that could change.
extended stay hotels nashville Comments are encouraged, but you must follow our User Agreement . 1. Keep it civil and stay on topic. 2. No profanity, vulgarity, racial slurs or personal attacks. 3. People who harass others or joke about tragedies will be blocked. 4. By posting your comment, you agree to allow Orange County Register Communications, Inc. the right to republish your name and comment in additional Register publications without any notification or payment.