Property Management Market Trends with Jeff Hacker

Our topic on The Property Management Show podcast today is something that’s really interesting, especially if you own a property management company. Today, we’re diving into property management market trends. The guest who’s joining us is Jeff Hacker, owner of Bayside Property Management. He’s finding that a lot of the investors he works with are feeling priced out of the market in California’s Bay Area, and that’s only one of the property management market trends we’re going to talk about on today’s show. Jeff Hacker and Property Management Market Trends He’s Noticed Bayside Property Management has been in the Bay Area for more than 30 years, and Jeff has been at the helm for the last 15 years. He works with a lot of small investors who are feeling priced out of the local market, so he’s been helping them invest in other markets. Consulting with local investors who don’t have the budget to invest in San Francisco and the surrounding markets has given him some keen insight into what’s going on in the property management industry all over the country. Defining the Three Market Tiers Jeff’s work is taking him through three different levels of property management markets, which we’re identifying as primary markets, secondary markets, and tertiary markets. How are those defined? Primary markets are also called ‘gateway markets’, and after those, we have secondary and tertiary markets to buy property. Most people define these markets on population numbers, but that isn’t always the best way to do it. Usually, a primary market has at least five or six million people and then secondary markets have between a million and five million residents, and tertiary markets have fewer than one million people living there. But from an investment point of view, there are more important factors than population numbers. Jeff suggests that you look at other things. Investors may care less about population and more about: * Job growth * Economic strength * Whether there’s a university or professional sports teams * Airports * Access to shopping, restaurants, and culture You’ll want to know what kinds of real estate transactions happened over last 10 or 12 years. Research the volume, sales numbers, and what’s going on with the cap rate. All of this plays into how you define each market and decide whether it’s a viable place to invest. Bakersfield, California is a good example. If you’re looking simply at population, it might not seem like a great place to invest. But, the indicators listed above will show you that even though it’s a small market, Bakersfield is a good spot right now for real estate. Reno is another good example. Tesla is there now and a lot of people are moving out of California and into Nevada areas like Reno, Henderson, and even parts of Las Vegas to enjoy better tax rates. PM Grow Summit Sponsorship Property Management Market Trends: Shifting Demographics The biggest change has been in population demographics. Fifteen years ago, the number of college-educated renters was small. They tended to buy homes. But, when the recession hit in 2008 to 2010, there was a real shift in home ownership. People became disillusioned with owning property, and there was suddenly a fast growing segment of renters who had college educations. They are largely still in the market, and they tend to prefer urban and suburban environments, where they can find single-family homes in quiet and safe family neighborhoods. Single-family homes made up about 30 percent of the market 10 or 15 years ago, and now they make up 35 percent of the market, and that number is rising.