There is no doubt that the lock in effect has reduced the amount of mobility in most forms of real estate. The higher interest rate environment has dramatically reduced the number of people who are willing to give up their low interest rate mortgage and move to another property where their cost of borrowing is going to be much higher.
Some have chosen to move and put the house that they own on the rental market and in turn to rent at their new location. In these cases people are often moving for work and the decision to move is entirely based on financial considerations.
So we know that fewer people are selling. But what about in the rental market? Is absorption and mobility up or down in the past year?
Well all of the data that I have seen suggests that rental moves are down as well in most markets.
For landlords of existing stabilized properties, the lower unit turnover can translate into higher profit margins. While rents are not increasing as they did in 2021 and 2022 and to a lesser extent in 2023, the lower turnover means lower turnover costs.
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Host: Victor Menasce
email: podcast@victorjm.com