St. George Rents Trending Up or Down?
The real estate market in St George is trending toward positive growth according to recent reports. Anyone looking to rent or buy property in the St. George area can expect to see rent prices continue to increase gradually in the immediate future. Rent prices can be easily tracked and predicted by monitoring sale prices for homes. When home prices go up in the area, rent prices follow. However, the rate of increase in rents and home values is slowing down compared to the quick rise that we’ve seen in recent years. In the past decade, rent prices fell dramatically when the real estate market bottomed out in 2008.
After a few years of low prices for rentals, prices to rent or buy have gradually climbed back up, especially during the past two or three years. As the market has begun to stabilize, rent prices may be increasing, but real estate interest rates are currently decreasing. Low-interest rates are creating an opportunity for investors and first-time buyers to be able to get into a property more easily than in past years. However, investors, in particular, are experiencing a great opportunity to buy real estate at a low-interest rate, and also benefit from a current shortage in local rental properties.
Consequently, few rental properties are available, and landlords can charge more. There are not as many choices for renters, so some may pay more for the same space and amenities that would have cost less when the market was suffering just 5-7 years ago. An average rent price in St. George for a 3-bedroom single-family unit is around $950. This $950 average will likely continue a slow increase while the local population of St George and the surrounding area experiences a dramatic upsurge.
As Utah currently leads the nation in population growth, with Southern Utah growth leading the state, we can expect to see further increases in property prices, whether people might be looking to rent or buy. Washington County has grown in population by 22,000 since 2010, and that trend is predicted to continue. Rent prices have steadily risen with the housing market since 2010 as well.
Vacancy rates in the area have decreased with the spike in population. A rental vacancy has been recently measured at less than one percent. With a low rental housing inventory and a growing population, an increase in rent prices naturally follows. The predicted housing shortage will cause home prices to rise as well. Because the market is full of eager buyers and few homes, sellers are in a great position right now.
An added benefit for the local economy lies in direct correlation to the current housing shortage. Several new construction and development projects are slated to accommodate the increase in population. This new construction is helping to create lots of jobs in Washington County. Construction will need to keep pace with the growing population in coming years. As the population continues to grow, prices to rent or buy St. George real estate are likely to continue to slowly increase at a gradual and steady rate.
Some experts have speculated that the high rents in recent years are keeping some people renting, instead of being able to save up for a down payment for a home. Millenials are moving toward homeownership later than have previous generations. This competition in the housing market, specifically for rentals, bodes well for landlords and investors. Many young people are drawn to rent or buy in mini-cities near larger cities, or walkable suburban communities with urban amenities. Investors are wisely meeting that particular demand for housing in many metropolitan areas.
Rent or Buy
Article provided by Holiday Resort Realty