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Millennials head west for housing, and institutional investors follow
The Mountain States have seen a dramatic rise in apartment building rental income, as bigger real estate firms push into an area once dominated by smaller companies.
Millennials in search of more affordable digs are heading west, swapping Brooklyn for Boulder. And institutional investors are taking the hint.
Apartment building rental income nearly doubled between 2004 and 2018 in the eight Mountain States, according to a report from Trepp that examined properties in eight states, as cited in the Wall Street Journal. Net operating income grew by 7.33 percent in 2018 in those states of Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming.
The growth rate outstrips any other region in the country, as millennials hunt for cheaper housing, lower taxes and an escape from the city, according to the report.
The growth in a sector that until recently has been dominated by smaller firms has caught the attention of institutional investors. Kennedy Wilson, a publicly-traded real estate investment firm, made its first buy in Salt Lake City in 2012. Since then, it has grown its apartment portfolio to nearly 8,000 units, the Journal reported.
The Mountain States also saw the fastest home-price growth of any region between June 2018 and June 2019, according to the latest quarterly data from the Federal Housing Finance Agency.
The nationwide housing shortage also means people are willing to rent. A March study by the National Low Income Housing Coalition found Idaho had just 48 affordable units for every 100 extremely low-income households. [WSJ] — Georgia Kromrei