Dave wrote this post on Sept. 20, 2009, which is eerie because it sounds as if he's describing the Omaha we know today. A good economy for real estate investors, he suggested, looks different than a good economy for the rest of the business world:
- High interest rate environment. Landlords compete with house payments, so the higher rates our competitors charge, the more we can also charge in rents.
- Tight lending standards. If it is hard for people to borrow money, they are more likely to rent.
- Less new construction of apartments. All business is supply and demand. The lower the supply, no matter how small, the less competition you have.
- Big employment growth/low unemployment. [This wasn't in his original posting, but just to put Omaha's standing in this area into perspective, our unemployment rate is 4.7% and the U.S. average is 9.1%. Although our job growth, according to Sperling's Best Place is .09% - not very high.]
- Net population increase. The more people looking to rent, the better. [According to the Greater Omaha Economic Development Partnership, Omaha has grown 12.8% in the last ten years and a 5.5% growth is projected for the next five years.]
- High foreclosure rate. People have to live somewhere. It's not as if the demand for housing goes away.
- Families living separately. This one is hard to measure, but it is really good for our business. Say a family has five adult children and they all live at home. It is definitely better for property owners if all these people live in separate units.
