December 30th, 2022
In 2022, the uncertainty in the real estate market was triggered by the increase in interest rates by the Federal Reserve.
As we welcome 2023, there are many opinions on the pace of future increases, the possibility of inflation and its continuing impact on the larger economy. There is good news, at least for the Single-Family Rental Industry.
According to Green Street's 2022 U.S. Single-Family Rental Outlook Report, household formations are a key measure of housing demand. Over the next five years, they anticipate demand for approximately 7.5 million additional housing units, 10% above the average annual growth observed over the last ten years. Approximately 810,000 new households are expected to sign leases for single-family rentals, 1.5 times higher than the number of new apartment renters.
According to Morgan Stanley's 2023 Investment Outlook, real estate fundamentals remain strong and are helping to offset capital market weakness for high-quality assets. Embedded rental income growth should help to protect values amid a weaker macro backdrop. Industrial and residential fundamentals are leading, buoyed by record-low vacancy and secular tailwinds such as eCommerce and high rentership.
Increased volatility and the pullback in market liquidity provide a more favorable environment for investors who have the capital to acquire high-quality assets with robust fundamentals at a reduced basis in chosen markets.
At ILE Homes, we are focused on capitalizing on the temporary weakness in the market, to expand our portfolio of single-family homes across the Sunbelt during 2023.
Since inception, we have built an industry-leading platform - our team has over 200 years of experience and has completed over $3 billion in transactions that include acquisition, renovating, and managing over 6,000 homes. We are leveraging our existing platform to provide quality returns for existing and new investors.
Our current portfolio of 500 homes in five states anchors our plans to expand our footprint to 10,000 homes over the next five years. We are excited about 2023 and look forward to enabling investors to join our journey going forward.