Player FM 앱으로 오프라인으로 전환하세요!
Managing Your Forward Inflation Forecast
Manage episode 307440171 series 2084625
On today’s show we’re talking about rent growth. There are rising rents in many submarkets. For those who own their own home, they’re probably glad that their housing costs are fixed.
We have seen near record setting price increases for single family homes in many major markets across the US. The fact is, you can’t have price increases in the housing market and then experience no effect in the rental market. The two markets are not strongly linked together, but they are not completely isolated from each other either. If the cost of owning a new single family home goes up, you will also eventually see those costs reflected in the rents.
This dynamic environment has made it difficult for apartment investors and developers to forecast their business plans. If rents increased 20% in 2021, what should they forecast in 2022? Historically, widely accepted inflation metrics used a 2% escalation for rents over the past decade. What should you put in your numbers for 2022? Would you use the 6.1% CPI that we have experienced so far in 2021? Should you use zero? Should you use 2%? You can make an argument for any of those choices. But they will all be incorrect.
--------------
Host: Victor Menasce
email: podcast@victorjm.com
2281 에피소드
Manage episode 307440171 series 2084625
On today’s show we’re talking about rent growth. There are rising rents in many submarkets. For those who own their own home, they’re probably glad that their housing costs are fixed.
We have seen near record setting price increases for single family homes in many major markets across the US. The fact is, you can’t have price increases in the housing market and then experience no effect in the rental market. The two markets are not strongly linked together, but they are not completely isolated from each other either. If the cost of owning a new single family home goes up, you will also eventually see those costs reflected in the rents.
This dynamic environment has made it difficult for apartment investors and developers to forecast their business plans. If rents increased 20% in 2021, what should they forecast in 2022? Historically, widely accepted inflation metrics used a 2% escalation for rents over the past decade. What should you put in your numbers for 2022? Would you use the 6.1% CPI that we have experienced so far in 2021? Should you use zero? Should you use 2%? You can make an argument for any of those choices. But they will all be incorrect.
--------------
Host: Victor Menasce
email: podcast@victorjm.com
2281 에피소드
모든 에피소드
×플레이어 FM에 오신것을 환영합니다!
플레이어 FM은 웹에서 고품질 팟캐스트를 검색하여 지금 바로 즐길 수 있도록 합니다. 최고의 팟캐스트 앱이며 Android, iPhone 및 웹에서도 작동합니다. 장치 간 구독 동기화를 위해 가입하세요.