Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
Hey guys! I was looking at a retirement city that has 25% vacancy rate.
Here is some other data:
-population 21k
-population growth 14% (since 2000)
-median sales price 129k
-year-over-year return -12%
-quarter-over-quarter -14%
-sales price 5 years ago 192k
-2006 sales price 270K
-median rent listed 1250$ (-22% change since a year ago)
I like the fact that there's definitely room to grow (between 2006 price and current), however I am concerned about 25% vacancy rate and decreasing rents. Even though I am not sure if I SHOULD be concerned since this is a RETIREMENT city.
I am a little confused. Personally I would be MORE concerned if a retirement city has a 25% vacancy rate and decreasing rent. My personal thought would a strong "retirement area" would be more immuned to the economic issues. Based on what you are saying other than "retiree's" there are no other major employers or economic options drawing people.
Relying on supply and demand. The demand is decreasing, supplying is increasing causing rents to decrease. Unless the area had a sudden draw or a direct reason why it is experiencing the issues it is now experiencing. I would be very concerned about the long term viability.
Investor · San Diego, CA · Member since 2012 · 309 posts · 18 votes
12y
@Elizabeth Colegrove Thanks Elizabeth! I probably should not have included the 22% decrease in rent price, since it's not accurate. Zillow shows that number, but I the very middle number is about 1200$ (it goes up and down, not a steady line).
I honestly would not look at Zillow's rent estimates. We own 4 houses all over the county. Honestly the estimates are not current on any of them. I use zillow and craigslist to look at current rents. When I am pricing a new area before I buy, I have my realtor pull the mls rental comps for the area.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y
If population has grown 12% and there is 25% vacancy, to me some data is missing. Did the area experience heavy building in the early 2000's? How many units are you planning on buying?
A house or a couple units, I wouldn't be scared with that demographic.
What is the future look like? Jobs? More retirees coming?
According to neighborhoodscout.com, 70% of houses were built in 1970-1999, with 20% in 2000's. Since 70% of people are retirerees, I wasn't too concerned about jobs in the area, however here's what is going on according to city's chamber of commerce:
major public employers are school, library, post office, county government; major private employers are Safeway, a few copper mines, real estate. There are 20 nursing homes and bunch of recreational facilities. Newspaper states there will be a hospital one day, but who knows.