Entering a new quarter the media has been flush with fresh economic reports. So how does it all stack for American investors and where are the savviest looking at for the best returns going forward?
All the data absolutely adds more fuel to the current trend in real estate investors looking outwards to secondary markets like Worcester, Massachusetts where the multifamily market has been rebounding quickly.
A new 2013 Investor Sentiment Survey shows confidence hitting a new record high fueled by strengthening fundamentals and low rates. So far the index has proven to be a “very accurate foreteller of economic direction” according to the director of one of the nation’s leading commercial real estate firms. Of those surveyed multifamily housing remained the most popular sector for investment.
This seconds the CCIM Institute’s First Quarter National Market Trends Report for the commercial real estate industry which in coordination with the National Association of Realtors reveals a rapidly improving market with high double digit gains.
Acquisition and leasing of multifamily apartments continued to attract the most investment according to the report with more rent growth and rising values predicted ahead.
These trends are expected to be compounded by a lack of housing inventory, which could contract even further as home builders reign in new projects. While Bloomberg News reports new construction surged more than analysts predicted in March 2013, it was multifamily that carried the numbers; hitting the highest level in over 7 years. Up 31%, multifamily is banking on robust growth as builder confidence drops on rising material and labor costs for single families and restrictive mortgage lending.
According to commercial real estate data compiler LoopNet Worcester’s multifamily property market has seen a sharp turn around since the middle of 2012. In fact, it was a year ago that asking prices for this sector really turned around for Worcester on a state, county and metro level. Real sales prices followed through, catching on in the second quarter, while time on market has continued to fall.
Right now there are great commercial real estate investment opportunities in areas like Worcester, MA and if you are backed by an excellent, local full service property management company there is nothing keeping any investor anywhere in the U.S. from enjoying the rewards to be had.
For those expecting a tax refund or wanting to minimize taxes next year contributing to a self-directed IRA and investing in multifamily in Boston’s secondary markets like Worcester could be a very savvy move for increased yields and long term wealth building while giving up less to Uncle Sam.