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Property Management Blog

The Birch Quarterly January 2016

System - Sunday, January 24, 2016
Property Managment Blog

Education

Birch Management remains committed to our core fundamentals of education, technology, and industry involvement. The dedication to these specific fundamentals keeps the team current on best practices, and energized to continue to provide best in class customer service!

This Spring, we will have team members participating in several industry events as well as two team members that are within the process of becoming licensed real estate brokers.

Our Spring industry and educational involvement includes NCREC pre-licensing and post licensing classes, a full day eviction and collections seminar, the NC Chapter of the National Association of Residential Property Managers conference as well as several other classes and events.

Buyers vs. Renters

Over the past few years there has been much that has fundamentally changed in the residential real estate world, nothing more so than the home ownership, and conversely the rental population. We had the pleasure of hearing Dr. Lawrence Yun, Chief Economist of the National Association of Realtors present at a recent event. He had a very interesting look into how each market impacts the other. Below is an excerpt from Dr. Yun:

In August, rents spiked 3.6% over the same time a year earlier, the fastest pace since 2008. As rental vacancy rates fall across most parts of the country and more jobs are created, they will continue to jump further. This trend is both good and bad news.
 Naturally, people collecting rents are thrilled with the gains they're seeing. Both large apartment investors and mom-and-pop landlords are enjoying the best conditions they've seen in years.

Of course, renters don't like forking over more money to be tenants. That's why, when rents rise strongly, it creates demand for home buying. But that isn't happening this time. In fact, the share of first time buyers, who typically lead the move from renting to owning, continues to hover at near 30- year lows.

Rising rents are making it difficult for potential first-time buyers to become owners, especially since rent growth is outpacing wage gains.

The weak wage growth is a consequence of decade-long subpar economic growth. Historically, U.S. gross domestic product grows at a 3% annual rate. But since the recession, growth has been averaging only 2.2%. A decrease of 0.8 percentage points might sound small but, in an economy of $18 trillion, it has a significant, cumulative impact. This equates to a 36% lag.


 Meanwhile, home prices are rising, in large part because builders aren't adding new homes for sale at a rate matching demand. Only 5 million single family and apartment homes have been built in the last five years, even though 12.5 million jobs have been added during that period.

The lag in construction represents good and bad news. It's helping to keep rents and home prices up, but it's making home ownership more difficult as tenants struggle to save for the down payment they'll need to buy an increasingly costly home. While the construction outlook is unclear, until builders contribute to the overall housing stock at a more normal pace, home prices and rents will continue to rise.

Dr. Yun does a great job at explaining the national trends behind the data surrounding home prices and rents. The Triad is not completely contrary to what we are seeing nationally, but certainly lagging.

While the employment numbers reported later in this publication are not seasonally adjusted, they appear to show a significant jump in employment to the last reporting period compared to similar periods in 2013 and 2014. As Dr. Yun alluded to, this is para-mount to an improving housing market, both in the for sale and for rent markets. Household formations have shown some increase nationally, as well as our market.

The Triad has real opportunity in the large scale manufacturing industry. Currently, there are two sectors that boast the greatest opportunity for significant job growth in our region, aviation and automobile manufacturing.

Piedmont Triad International Airport has seen a recent boom with the development of HondaJet, FedEx, as well as several smaller employers at PTI. HondaJet recently received final FAA certification to begin delivery of a very light business jet, they currently employ over 1,200 people at an average salary of $70,000. This will be one of the only sites of this size in the country to offer direct airfield access.

A "megasite" has been assembled in northern Randolph County (just outside of Guilford County) that is currently being marketed to automobile manufacturers for a new plant. The impact could be significant! A similar facility in Greenville, SC has been re-sponsible for creating over 40,000 jobs!. While there are no guarantees, previous developments have yielded similar positive growth in regions where these facilities have been located.

Thanks to the hard work of many, our region has sustained the loss of 90,000 jobs in a short period very well and is well suited for growth.

Market Statistics

 

Service Announcements

Toll Free Direct Number: Our clients can now simply dial a toll free number 1-844-5CLIENT (525-4368) to be routed to our entire Client Services Team. If someone is available your call will be answered, if you get our client voicemail please leave a detailed message so we may return your call as soon as possible. Do keep in mind that our Client Services Team is always on the go evaluating the needs of
 your properties!

Owner Web Login: Our industry leading owner web login on our website is our clients' link to their information. Here is a sample of the information that is available by logging into your secure account on our website:

  • Account Balance
  • Open Payables
  • Open Receivables (has my tenant paid)
  • Service Issues
  • Posted Invoices- retrieve and store copies of all invoices posted to your account
  • Reports, including your 1099!

Operating Schedule: Our regular operating hours are Monday to Thursday 8:30am-5:00pm and Fridays from 8:30am- 4:00pm. Our next scheduled office closings will be Friday March 25, 2016 in observance of Good Friday.

Our Mission

Our mission is to offer personalized and professional service to both our clients and customers by building strong relationships, utilizing the latest technology, implementing effective marketing strategies, following consistent systems all with honesty and integrity throughout every facet of our business.