Property Management Blog

RESIDENTIAL REAL ESTATE RENTALS … SUPPLY & DEMAND: Will Supply Growth Outpace Tenant Demand?

KRS Holdings - Monday, March 9, 2020

2020 Census as a Decision Driver for Landlords


 


For frequent readers of our Monthly Newsletter, you’ll recall that my Q1 emphasis is on the results of the once-every-decade U.S. Census scheduled in 2020. Why? The results will influence both supply and demand for rentals by both landlords and tenants respectively. That’s not a subject for speculation, just one that will reveal reality once all the data is in.


There are several consequences of the census that will determine representation in Congress, where new businesses (including residential rentals) can build, how crowded local schools will be over the next ten years plus money available for such things as road repairs and other community enhancement projects. All of which will be critical considerations in determining supply and demand for residential rentals, both single and multi-family. Supply and demand … real or anticipated … will guide acquisition and retention of rental units by residential landlords. 


Census Facts to Track

Residential real estate investors … remain alert to these key census facts. Year-over-year trends are the details to watch.


  • Household Formation
  • Vacancy Rates
  • Population Shifts


Be sure to read our January and February issues on Household Formation and Vacancy Rates either as a refresher or a preface to …


This month, in the third of three articles, we’ll concentrate on …


Population Shifts: The United States Census Bureau highlights migration trends across the states and sketches a picture of looming political changes that will take place after the complete census of 2020.


The continued exodus of Americans away from less economically competitive states and movement toward regions with more hospitable growth remains evident in the new census numbers. Americans continue to vote with their feet in favor of those states creating an environment that supports economic growth and opportunity.

We’ll see how the Commonwealth of Virginia stacks up based on

how well we complement these preferred residential profiles.


Based on data from the Virginia Economic Development Partnership Virginia enjoys a diverse mix of key industries … all poised for growth that is anticipated to ensure long-term economic success for future generations of Virginians. Additionally, the Commonwealth’s middle market cities and rural locations …  think Central Virginia … are attractive options for companies seeking to relocate operations out of higher-cost sites. That means jobs!


All the above good news also serves to attract workers seeking stable job opportunities in an assortment of growth industries as varied as:


  • Food & Beverage Processing
  • Information Technology
  • Life Sciences
  • Manufacturing
  • Supply Chain Management


These employment resources, coupled with an exceptional quality of life, is likely to be an enduring lure for new additions to the Virginia population and yield a growing pool of residential tenants for landlords in Central Virginia.


If the above yields census results supporting growing population trends in the Commonwealth, that will determine critical considerations in determining supply and demand for residential rentals. 

Reality Check: Remember so far, we’ve been looking in the rear-view mirror at 2010 Census trends. What’s important is to compare 2020 Census data as it becomes available.


Supply and demand … real or anticipated … will guide acquisition and retention of rental units by residential landlords. Of course, there will be local variations in supply and demand for both single and multi-family rental units in Central Virginia. That said, residential rental investors will be wise to stay current as the results of the 2020 Census unfold and compare the year-over-year trends.

Summary

Lots going on in the Richmond /Tidewater/Northern Virginia residential rental markets … most of it positive and upbeat. So, residential real estate investors … veterans and wannabes … will find opportunities in 2020. That said, this being a year-of-the-Census, we all need to be cognizant of trends as they develop and put on our investor hats to evaluate and weigh risks vs. rewards.