Friday, June 28, 2013

Regional Growth Slows From 2012 via Dallas Fed

The regional economy has picked up, posting stronger employment growth in April than in March. However, this year is starting out more slowly than 2012.

In addition to last year’s soft spots, such as exports, new headwinds are blowing. These include federal government budget cuts and tax increases. State initial jobless claims and the Texas unemployment rate are higher now than they were at year-end. It’s likely that Texas job growth in 2013 won’t be on par with the robust growth in 2012.

Texas will continue to grow faster than the nation, but the state’s growth premium vis-à-vis the nation has fallen slightly.

Read more...Regional Growth Slows From 2012 - Dallas Fed

Multifamily Trends & Predictions from Axiometrics (Webinar) via AppFolio

With our co-hosts Grace Hill and Axiometics we hosted a great webinar entitled “Multifamily Trends & Predictions from Axiometrics” featuring Jay Denton, VP of Research, Axiometrics, Inc.

Jay is a fantastic speaker and had a ton of great content to share. He shared several statistics and facts on the current national rent growth, key economic drivers that are affecting these growth rates and which markets are at risk for oversupply.

A Few Interesting Takeaways
Since May 2009, the national occupancy rate continues to improve, but effective rent growth has been moderating since July 2011.

Read more...Multifamily Trends & Predictions from Axiometrics (Webinar) via AppFolio

Fed’s Dudley: QE3, Low Rates Will Stick Around via

Throwing some cold water on market fears that the Federal Reserve could soon taper off its third round of quantitative easing, the central bank’s New York president said Thursday that the Fed would maintain the status quo on QE3 if the economic recovery doesn’t keep pace with projections. At a press briefing here Thursday morning, William Dudley, president and CEO of the Federal Reserve Bank of New York, also said a near-term increase in interest rates was unlikely.

“Some commentators have interpreted the recent shift in the market-implied path of short-term interest rates as indicating that market participants now expect the first increases in the federal funds rate target to come much earlier than previously thought,” Dudley said in prepared remarks. Such an expectation, he added, would be “quite out of sync” with both recent statements by the Federal Open Market Committee “and the expectations of most FOMC participants.”

Read more...Fed’s Dudley: QE3, Low Rates Will Stick Around - Daily News Article -

Thursday, June 27, 2013

ALN Monthly Newsletter June 2013 via ALN Apartment Data

ALN Data just released their May 2013 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter June 2013 via ALN Apartment Data

Will the housing recovery leave you behind? via CBS News

While some Americans are welcoming the reboot of the housing market, millions may have to kiss the American Dream goodbye.

The growing momentum in the housing market has brought with it rising home prices and home equity, a tightened rental market and the renewal of the dormant construction and real estate industries. But even as the most glaring problems of the housing crisis begin to fade, millions of people are struggling to buy their first homes or pay for the ones they already have.

Americans who want to own or keep their homes still face three big problems: mortgage delinquency, housing unaffordability and tough lending standards.

Read more...Will the housing recovery leave you behind? - CBS News

CRE Fundamentals Continue To Recover -- So Where Are All the Deals? via CoStar Group

A recent analysis of data from the CoStar Commercial Repeat Sale Index (CCRSI) finds that commercial real estate investment transaction activity has progressed much like the overall economy, showing steady but painfully slow improvement.

While prices have recovered from the trough of the Great Recession in all major markets except Jacksonville and Northern New Jersey since mid-2010, the current environment is definitely of the half-full/half-empty variety, with half of the top U.S. markets showing improved liquidity over the past two years, and half not yet showing, according to the analysis of value-weighted CCRSI data by Senior Financial Analyst Xiaojing Li with Property and Portfolio Research (PPR), CoStar’s economic forecasting company.

Among the most noteworthy of the findings may be the percentage of properties sold within the first six months of hitting the market.

Read more...CRE Fundamentals Continue To Recover -- So Where Are All the Deals? - CoStar Group

Wednesday, June 26, 2013

SPECIAL REPORT: Key Advice for Underwriting Apartment Properties via Multi-Housing News Online

When acquiring apartments, be skeptical of any and all statistics that are provided to you. That was one piece of advice given to the audience during a educational session titled “From Pro Forma to Performance: How to Make Your New Asset Hum in the First 90 Days.” The session was presented during the National Apartment Association 2013 Education Conference and Exposition held here this week.

Regarding investment sales underwriting, panelists quoted from Alexandra Jackiw, managing director of McKinley: “Assume all data is suspect.” This is not necessarily because there is malice or ill intent, but “owners may have their numbers wrong,” and these errors may be perpetuated over time, said Barbara Savona, CEO of Sprout Marketing.

Read more...SPECIAL REPORT: Key Advice for Underwriting Apartment Properties | Multi-Housing News Online

Regional Fed Chiefs Warn on 'Too Big to Fail' Banks via

U.S. efforts to rein in "too big to fail" banks in the wake of the 2008 financial crisis have fallen well short and must be replaced with more aggressive measures to split up or downsize the largest financial firms, a pair of Federal Reserve bank presidents and a top regulatory official will tell lawmakers Wednesday.

"These institutions operate under a privileged status that exacts an unfair and nontransparent tax upon the American people and represents not only a threat to financial stability, but to the rule of law," Dallas Fed President Richard Fisher said in prepared remarks.

Mr. Fisher is slated to appear at the latest hearing of House lawmakers focused on the 2010 Dodd-Frank financial overhaul law and whether it effectively addressed the risks posed by large, complex financial institutions on the broader economy. Richmond Fed President Jeffrey Lacker, Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig, and former FDIC Chairman Sheila Bair are also slated to testify.

Read more...Regional Fed Chiefs Warn on 'Too Big to Fail' Banks via

21 Questions on Comparable Real Estate Assets via Multifamily Insight Blog

When people look for comparable assets (“comps”) the sole focal point is often price. Price-price-price. People look for comparable sales data that proves or supports the value of a similar property. As a seller of real estate this makes perfect sense as you about to exit the transaction. As a buyer the price-price-price perspective is very short-sighted.

Finding comps begins with a review of comparable assets in the same submarket as the asset under consideration. It is imperative to not stray from the submarket in question as this is where the subject asset is competing for customers.

It is important that someone from your team (or you) go see, in person, on foot, these comparable assets. NO driving by. NO pulling down photos from the web. Go see, go touch the competition. You’ve come this far, after all. If your acquisition candidate has all new stainless steel appliances and the competitors believe “avocado green” is still in fashion… there’s only one way to find out- go see.

Read more...21 Questions on Comparable Real Estate Assets | Multifamily Insight Blog

The Anticipated & Ignored Impact of Rising Rates on Commercial Real Estate Values via

The last week has seen an amazing proliferation of researchers and journalists cogitating on the impact of rising interest rates on commercial property values. It’s a critical issue for our industry. But it’s hardly new or unexpected or unexplored. The countercyclical influence of low interest rates on values is beginning to ebb; for many risk-averse investors and lenders, understanding the magnitude of that influence was most important when it was approaching its peak. In some segments of the market, cash flow will lag adjustments in the cost of capital with significant implications for property value trajectories. However inconvienient, the time for making that connection and raising a flag is in the rearview mirror, even if it’s only now becoming good copy for the national broadsheets.

Read more...The Anticipated & Ignored Impact of Rising Rates on Commercial Real Estate Values - Chief Economist Article -

Tuesday, June 25, 2013

Monthly Review of Texas Economy, June 2013 -- Real Estate Center at Texas A&M

Texas continues to create jobs at a pace higher than the nation. The Texas economy gained 297,900 nonagricultural jobs from May 2012 to May 2013, an annual growth rate of 2.7 percent compared with 1.6 percent for the United States (Table 1 and Figure 1). The state’s nongovernment sector added 279,000 jobs, an annual growth rate of 3.1 percent compared with 2 percent for the nation’s private sector (Table 1).

Texas’ seasonally adjusted unemployment rate fell to 6.5 percent in May 2013 from 7 percent in May 2012. The nation’s rate decreased from 8.2 to 7.6 percent (Table 1).

Read more...Monthly Review of Texas Economy, June 2013 -- Real Estate Center at Texas A&M

Wall Street’s $8 Billion CMBS in Limbo as Bulls Retreat via Bloomberg

Wall Street firms spent the past six months increasing commercial mortgage origination as investors bought the most debt in six years. That’s now backfiring as banks prepare to market $7.5 billion of loans earmarked to be sold as bonds before credit markets took a dive this month.

Investors are demanding 1.2 percentage points more than the benchmark swap rate to buy new commercial mortgage backed securities tied to shopping malls, skyscrapers, hotels and apartment buildings, according to data compiled by Bloomberg. That’s up from 72 basis points in February, the narrowest spread since sales revived in 2009, the data show. Lenders’ profits are eroded when values of the securities fall.

The CMBS market is poised for its worst month in almost two years after the Federal Reserve signaled it may curb stimulus efforts as the economy shows sign of improvement.

Read more...Wall Street’s $8 Billion CMBS in Limbo as Bulls Retreat - Bloomberg

Not All is Gold in the Single-Family Home Rental Market via Axiometrics

In a previous blog post, we discussed the active single-family rental (SFR) sector, pointing out that private equity investors and public REITs are snapping up single-family homes and turning them around as rentals. Given the billions flowing into the sector, it would stand to reason that SFR could become the new commercial real estate (CRE) investment class, much like multifamily has been.

The truth is that there is little danger that the single-family rental asset class will grow to the point where it overtakes apartments as an asset class. One example of this is that Colony American Homes Inc. (CAH) – the REIT that owns 9,931 SFRs – postponed its June 2013 IPO, stating unfavorable market conditions. The timing of the offering could not have been worse. Concern about the tapering off of the Federal Reserve’s monetary stimulus caused interest rates to rise, spotlighting the prospect of interest rates’ eventual rise. This resulted in a selloff in shares of real-estate investment trusts that pay most of their taxable income to shareholders as dividends.

Read more...Not All is Gold in the Single-Family Home Rental Market

Top 10 Apartment Resident Customer Satisfaction Complaints via Multifamily Insiders

J Turner Research, a leading marketing research firm exclusively serving the multifamily industry, today announced a ranking of the top 10 apartment resident complaints, as revealed in an analysis of 10,000 customer satisfaction surveys completed over the past two years at communities nationwide. Results from the survey analysis were released last week at the National Apartment Association Education Conference and Exposition in San Diego.

According to the analysis, apartment residents are most likely to complain about rental rates more than any other issue. In fact, rent rates were more than twice as likely to be mentioned compared to concerns over pet waste, which perennially rank high in renter dissatisfaction. Additionally, rent prices were almost three times more likely to be highlighted by disgruntled residents than noise, which did not even crack the top 10:

Top 10 Multifamily Apartment Resident Complaints:

Read more...Top 10 Apartment Resident Customer Satisfaction Complaints - Multifamily Blogs

Monday, June 24, 2013

Mandatory Benchmarking via Commercial Property Executive

Get ready to report your building’s energy efficiency. The roster of U.S. cities requiring commercial property owners to benchmark such performance and disclose results to municipal authorities and the market at large is quickly approaching double digits.

The Minneapolis City Council approved the city’s ordinance in early February, boosting the number of municipal benchmarking mandates to seven—all of them major markets. The larger of the Twin Cities joined New York City, Washington, D.C., San Francisco, Seattle, Austin and previous newcomer Philadelphia in adopting mildly controversial annual benchmarking and disclosure regulations, each with its own program tweaks.

Boston became the eighth member of the club on May 9, planning to reduce greenhouse-gas emissions 25 percent by 2020. Nearby Cambridge is debating a proposed program, along with Chicago, Portland and Boulder.

Read more...Mandatory Benchmarking | Commercial Property Executive

Forbes says Houston No. 3 for construction activity via Real Estate Center at Texas A&M

Houston took the No. 3 spot on Forbes’ recent list of the metropolitan areas with the most new construction. The list, compiled with data from McGraw Hill Construction, is ranked by the dollar volume of new total building construction starts between January and May 2013. Houston’s totaled $4.8 million, up 8 percent from the same period a year ago.

Additionally, Houston’s full-year 2012 total was $11.1 billion, up 23 percent from 2011.

Read more...Forbes says Houston No. 3 for construction activity via Real Estate Center at Texas A&M

Dallas Fed: Regional Manufacturing Activity "surges" in June via Calculated Risk

From the Dallas Fed: Texas Manufacturing Activity Surges and Outlook Improves

Texas factory activity increased sharply in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose six points to 17.1, posting its highest reading in more than two years.

Read more...Calculated Risk: Dallas Fed: Regional Manufacturing Activity "surges" in June

Texas Employment Update via Dallas Fed

The Texas economy continued to expand in May; the state added 11,500 jobs. Year to date, Texas has gained 95,200 jobs (Table 1).

Read more...Texas Employment Update - Dallas Fed

Property Assessed Clean Energy Act To Be Reviewed by the City of Austin via Commercial Property Executive

Texas legislation was modified on June 19 by Governor Rick Perry to allow commercial and industrial building owners to access low-cost, long-term financing in the private sector for energy-efficiency upgrades and water conservation. With his signature the PACE program became effective immediately.

PACE (the Property Assessed Clean Energy Act) is an initiative that is pro-businesses, pro-jobs and pro-environment, offering government loans for periods of up to 20 years to existing structures on residential, commercial, industrial, or other real property. More details about the program can be found on Keeping PACE in Texas.

To access the program, those interested have to present an improvement project to a third party administrator employed by the government. The review results must show that the utility savings reimburse the initial investment.

Read more...Property Assessed Clean Energy Act To Be Reviewed by the City of Austin | Commercial Property Executive

Friday, June 21, 2013

Big Cities Grow Faster than Suburban Areas (2010-2012) via Axiometrics

During the late 1990s and the early 2000s, much was said and written about the return to urban villages. As opposed to suburban sprawl, the dream among developers and city zoning boards was to create “pedestrian friendly” developments, complete with “workability” and “live-work-play” environments. Yet it really wasn’t until the aftermath of the 2007-2009 financial meltdown that interest in such urban-oriented developments really took hold spurred, in part, by a growing population in downtown and infill locations.

In his article “A Big City Growth Revival?” Metropolitan Policy Program Senior Fellow William Frey uses U.S. Census Bureau statistics to point out that, between 2010 and 2012, cities with over one-half million in population grew more rapidly than their corresponding suburbs or smaller cities. He notes that data for 16 of the 20 largest U.S. cities showed larger growth rates, on average, during 2011-2012 than compared to 2010-2011.

Other interesting facts he includes in his article are:

Read more...Big Cities Grow Faster than Suburban Areas (2010-2012) via Axiometrics

OKC, Austin Top "Recession-Busting" Regions List via

Area Development Online has announced its "recession-busting" MSAs; cities and regions that have had success in "rebooting their economies and creating good-paying jobs," according to the website. In the "big cities" category (of population more than one million), Oklahoma City led the charge, followed by the Austin, TX MSA.

In ranking Oklahoma City first, Area Development Online pointed out that the area was named the least-costly city to do business among 13 mid-sized cities, according to KPMG. The region is also boasts an energy economy, which has assisted with job creation.

Meanwhile, in Austin, the economic driver is technology – the MSA is home to well-known companies including Dell, IBM, Apple and Samsung. Apple, in fact, is expanding its facilities, which should create up to 3,600 new jobs.

Read more...OKC, Austin Top "Recession-Busting" Regions List - Daily News Article -

Houston Continues a Top 10-Performing MSA via

Dallas-based Axiometrics Inc. released its top- and bottom-performing multifamily MSAs across the country. Though annual effective rent growth slowed slightly year-over-year in Houston, the MSA is 10th among other major metropolitan regions when it comes to solid apartment fundamentals.

Annual effective rents in Houston decreased slightly year-over-year from 6.1% in May 2012 to 6% during May 2013. Occupancy, however, was higher, at 94.4% during May 2013 (versus 93.1% during May 2012).

Read more...Houston Continues a Top 10-Performing MSA - Daily News Article -

Are Apartments Energy Efficient? via National Multi Housing Council

Several recent reports from both energy industry consultants and academics have suggested that apartments are significantly less energy efficient compared with their single-family counterparts. The proof: Renters use nearly a third more energy per square foot than homeowners.

This claim comes from the data produced by the U.S. Energy Information Administration’s (EIA’s) most recent Residential Energy Consumption Survey (RECS) (2009). EIA conducts the survey every four years and sampled more than 12,000 housing units in the latest version. Researchers like to use this survey as a benchmark because of the high quality of the data; the energy usage and billing data get compared to actual data from the utility companies, which is something many private energy studies are unable to do.

Read more...NMHC Research Notes: Are Apartments Energy Efficient? - - NMHC - National Multi Housing Council

Thursday, June 20, 2013

DFW ranks third in index of economic vitality via Dallas Business Journal

Dallas-Fort Worth is experiencing good times economically, according to the latest On Numbers Economic Index which ranked DFW as the third most-vital of the nation's 102 major metropolitan areas.

On Numbers, a feature of American City Business Journals, ranked Austin as No. 1 and Provo, Utah, as No. 2 on the Index. Oklahoma City trailed DFW in the fourth position.

According to On Numbers, DFW got its high ranking because of a mixture of positive indicators. DFW is one of four markets with jobless rates of 6 percent or less and employment has risen more than 2 percent in the past year, On Numbers said. Home values have increased since 2008 in the area.

Read more...DFW ranks third in index of economic vitality - Dallas Business Journal

Analysis on Tapering QE3 via Calculated Risk

Last month there were quite a few analysts predicting the Fed would start tapering off QE purchases in June. My response was Three words: Will Not Happen.

Now we are seeing a flurry of articles with headlines suggesting reducing the monthly purchases of assets is "close" or "near". It depends on the definition of "close" or "near", but it is clear tapering will not happen until later this year at the earliest. Here is the key quote from Bernanke:

Read more...Calculated Risk: Analysis on Tapering QE3

Wednesday, June 19, 2013

Houston Economic Update June 2013 via FRB of Dallas

The Houston Business-Cycle Index jumped up from a revised March growth rate of 2 percent to 8.9 percent in April. This implies a sudden acceleration in the pace of economic expansion in the region and may underscore a reversal of the slight decelerating trend that dominated the latter half of 2012. Directly and indirectly, energy-related activity continues to spur other area industries. Some stresses from the global economy have dissipated, but continued fiscal and regulatory uncertainties remain the largest clouds on the horizon. Overall, Houston-area fundamentals remain healthy.

Houston payroll employment grew at an annualized pace of 5.2 percent in April and 4.5 percent over the past three months. Construction, leisure and hospitality, and financial activities were the fastest-growing sectors. Manufacturing, which has added 900 jobs year to date, contracted 3.4 percent from March to April.

Read more...Houston Economic Update June 2013 via FRB of Dallas

The Risk of It All via Commercial Property Executive

When the financial crisis began, most investors agreed that the economy needed the various stimulus programs initiated by the administration and the easy money policies provided by the Federal Reserve. However, a quick look at the debt clock shows us that several years later we are stuck with a $16.8 trillion national debt and a Fed balance sheet of $3.1 trillion while job and economic growth remain tepid. It is not surprising that increasing numbers of investors wonder whether such policies—especially QE3—are becoming less a fundamental support and more a psychological crutch.

Real Estate Research Corporation’s (RERC’s) institutional investment survey respondents, in fact, take this view a step further. Once seen as one of the strongest assets to the economy, monetary policy is now viewed as contributing to investor uncertainty and increasing risk for investors. Some RERC survey respondents noted that such accommodative support by the Fed is “becoming more harmful than helpful,” and that it is “re-inflating asset bubbles.” Others noted that the “distortions and uncertainty” caused by the Fed’s easy money policies are “rewarding risk-taking and borrowing, while punishing saving.”

Read more...The Risk of It All | Commercial Property Executive

College Graduates Face Tall Hurdles to Home Ownership via WSJ

The volatile housing market has slowed purchases of starter homes, but it hasn’t wiped out college graduates’ desire for them.

Members of the Class of 2013 regard buying their own house or apartment as the most significant consumer purchase on the path to adulthood, based on an online survey by The Wall Street Journal. Among seven purchases on the survey, owning a home ranked first by far, followed by starting a 401K plan and paying for one’s own health insurance. Other options, in order of popularity, were buying a new car, paying for a major vacation, and buying a TV or sofa.

Read more...College Graduates Face Tall Hurdles to Home Ownership - Real Time Economics - WSJ

Dallas Home Prices Do Best Since Bubble: Riskless Return via Bloomberg

Dallas has been the best-performing of 20 major housing markets in the U.S. since the real estate bubble burst in 2006, as job and population growth pushes up demand.

The north Texas metropolitan area is the only one among the cities in the S&P/Case-Shiller index with a gain, on an absolute basis as well as adjusted for price swings, in the seven years through March, according to the BLOOMBERG RISKLESS RETURN RANKING based on the most recent data available.

“We didn’t have a bubble in the first place, so there was no real collapse in prices,” said Mark Dotzour, chief economist at the real estate center at Texas A&M University in College Station, Texas. “I expect we’ll be in this seller’s market that’ll lead to higher appreciation than normal this year and next.”

Read more...Dallas Home Prices Do Best Since Bubble: Riskless Return - Bloomberg

Apartment Deceleration? via Commercial Property Executive

Despite seasonal volatility in the first quarter, commercial real estate prices across the board posted strong annual gains, demonstrating the breadth of the pricing recovery as investment activity expands across the property types.

Multi-family prices have had the best recovery by far of the four major property segments. After posting the strongest results in the first quarter, pricing in this segment is now up 33 percent from its trough in 2009. While the multi-family sector’s outperformance is partially driven by relatively stronger fundamentals, it is also a function of lenders, largely the GSEs, providing cheap debt financing following the downturn. However, there are signs of a deceleration in multi-family fundamentals, mainly as a result of growing supply, especially in markets where pricing has already reached its prior peak level. The multi-family index’s gains of 0.8 percent in the first quarter marked a deceleration from its quarterly average pace of 3.2 percent over the past two years.

Read more...Apartment Deceleration? | Commercial Property Executive

Tuesday, June 18, 2013

Values, Interest Rates Concern Experts via

Investor confidence is at an all-time high, but some investors paying ever-higher prices for commercial and residential properties may not be looking far enough ahead at some of the potential danger signs, said speakers at today’s RealShare Investment & Finance conference here. While panelists expect interest rates to remain low for the near term, they do believe rates will begin to rise within the next three to four years—and rise quickly when they do—which will greatly impact buyers at refinancing if they’re buying at high prices due to cheap debt.

“Apartment pricing makes me nervous because until income rises, apartment rents can’t rise,” said Richard K. Green, professor /director and chair at the USC Lusk Center for Real Estate.

Read more...Values, Interest Rates Concern Experts - Daily News Article -

CMBS Sales Face $15 Billion Drop on Interest-Rate Jump, S&P Says via Bloomberg

Rising interest rates may trim issuance of commercial-mortgage bonds by $15 billion this year, according to Standard & Poor’s.

An increase of 55 basis points on 10-year Treasury yields coupled with a rise of 30 basis points on relative yields on top-ranked securities linked to property loans will put a damper on the resurgent market, S&P analysts led by Howard Esaki said yesterday in a note to clients. The analysts estimate 2013 sales of $65 billion after adjusting for the rising rates.

Read more...CMBS Sales Face $15 Billion Drop on Interest-Rate Jump, S&P Says - Bloomberg

CMBS 2.0 Delinquencies Virtually Non-Existent via CoStar Group

Delinquencies for U.S. CMBS 2.0 remain virtually nonexistent, which helped to keep the overall rate of late-pays steady, according to the latest index results from Fitch Ratings.

CMBS late-pays declined seven basis points (bps) in May to 7.37% from 7.44% a month earlier.

Meanwhile, delinquencies for transactions issued post-2009 (CMBS 2.0) stood at just 0.03%. The tighter post-recession credit environment coupled with still-low interest rates is helping to keep newer CMBS delinquencies hovering near zero.

Conversely, the peak vintage (2006-2008) delinquency rate remained high at 11.6%, compared with 6.75% for transactions issued in 2005 and prior.

Read more...CMBS 2.0 Delinquencies Virtually Non-Existent - CoStar Group

Commercial/Multifamily Mortgage Debt Outstanding Falls Slightly in Q1 via Multi-Housing News Online

The level of commercial/multifamily mortgage debt outstanding decreased by $4.9 billion, or 0.2 percent, in the first quarter of 2013, the first quarterly decrease since the third quarter of 2011, according to the Mortgage Bankers Association (MBA).

The $2.41 trillion in outstanding commercial/multifamily mortgage debt was $4.9 billion lower than the fourth quarter 2012 figure. Multifamily mortgage debt outstanding rose to $842 billion, an increase of $4.1 billion, or 0.5 percent, from the fourth quarter of 2012.

Read more...Commercial/Multifamily Mortgage Debt Outstanding Falls Slightly in Q1 | Multi-Housing News Online

Monday, June 17, 2013

Mid-year Review: Ten Economic Questions for 2013 via Calculated Risk

At the end of last year, I posted Ten Economic Questions for 2013. I followed up with a brief post on each question. The goal was to provide an overview of what I expected in 2013 (I don't have a crystal ball, but I think it helps to outline what I think will happen - and understand why I was wrong).

By request, here is a mid-year review (a little before mid-year). I've linked to my posts from the beginning of the year, with a brief excerpt and a few comments:

Read more...Calculated Risk: Mid-year Review: Ten Economic Questions for 2013

May 2013 Apartment Market Summary via Axiometrics

The apartment market posted positive results in May 2013. Annual effective rent growth was 3.34% while the occupancy rate increased 35 basis points (bps) from a year ago. Despite the recent, consistent slowing trend in effective rent growth at the national level, results did bump up slightly from April 2013 to May 2013, even though 73,629 units have already delivered across the country this year.

A number of differences become apparent when breaking the results down by asset class: All three asset classes (A, B, and C) increased effective rent growth from April to May; however, Class A only improved by 5 basis points, thus annual growth now sits at 2.82%. While Class A only showed a small improvement at the national level, there are several individual Metropolitan Statistical Areas (MSAs) that showed a stronger rebound for that class of property.

Read more...May 2013 Apartment Market Summary via Axiometrics

Texas Housing Recovery Gains Momentum via Dallas Fed

The Texas housing market is swiftly recovering as rapidly rising sales approach prehousing-boom levels and apartment rental demand remains strong. New home and apartment construction abounds, the product of a relatively strong regional economy generating jobs, drawing new residents and increasing consumer confidence.

The result: Texas home prices and rents have risen more rapidly than usual.

Further improvement is anticipated in the housing sector as the regional economy continues its expansion.

Read more...Texas Housing Recovery Gains Momentum via Dallas Fed

As Distress Dwindles, Value-Add Ramps Up via

Houston was a region that weathered the Great Recession and following financial meltdown fairly well. Still, the area did have some distress when it came to multifamily properties.

Not anymore, however. These days, the appetite for distressed and foreclosed multifamily properties has switched to an appetite for value-add multifamily assets. Transwestern's vice president of multifamily services Clint Duncan, who recently brokered the sale of Arbor Ridge, tells that value-add is a hot commodity in the Houston commercial real estate market.

One reason for the huge interest in value-add assets is because distressed multifamily properties are scarce. "The market is recovering and many distressed owners have been able to refinance," Duncan explains. "Even the tougher assets are doing pretty well, and institutional buyers are starting to look in that area."

Read more...As Distress Dwindles, Value-Add Ramps Up - Daily News Article -

Friday, June 14, 2013

DFW ALN apartment data May 2013 via Real Estate Center at Texas A&M

ALN Apartment Data has released the May 2013 apartment occupancy, effective rent data and more for apartments in the Dallas-Fort Worth market.

Read more...DFW ALN apartment data May 2013 via Real Estate Center at Texas A&M

Fannie Sees Slow Growth Through End of Decade via Mortgage News Daily

Fannie Mae's Economic Outlook series continued its 2013 theme "Transition to 'Normal?'" in its June edition saying that four years into an expansion it appears the country may be well into a prolonged period of sub-par but sustainable growth. Fannie Mae's economists say that they expect the annual growth rate between now and the end of the decade will average between 2.25 and 2.50 percent where the consensus of what would constitute normal will likely be around 2.75 percent. Thus growth will probably be a bit slower than the potential of the economy and if that proves incorrect it will likely be housing and energy development that drive it higher.

The economists, Doug Duncan, Orawin T. Velz, and Brian Hughes-Cromwick, say their intermediate term view has changed little since the beginning of the year; modest growth for this year before accelerating moderately next year, and a durable recovery for housing with homebuilding and construction employment returning to normal around 1916.

Read more...Fannie Sees Slow Growth Through End of Decade via Mortgage News Daily:

'via Blog this'

Unemployment Stats Do Not Tell the Entire Story via Axiometrics

On June 7, the U.S Bureau of Labor Statistics released employment figures for May, 2013. Statistically, unemployment stood at 7.6%, unchanged from April. The Bureau of Labor Statistics also pointed out that the number of unemployed persons was 11.8 million, again, unchanged from April. Also unchanged from April is that the long-term unemployed figure (which measures individuals who have been jobless for 27 weeks or more) was at 4.4 million – in fact those long-term, unemployed individuals accounted for 37.3% of the unemployed.

Depending on what side of the aisle they are on, politicians make a fuss about unemployment figures. If the unemployment rate is down, Democrats crow that the economy is improving. If it goes up, Republicans blame the Democratic president for failed policies.

Read more...Unemployment Stats Do Not Tell the Entire Story via Axiometrics

Analysis: Fed Likely to Push Back on Market Expectations of Rate Increase via WSJ

Federal Reserve officials have been trying to convince investors for weeks not to overreact when the central bank starts pulling back on its $85 billion-per-month bond-buying program. An adjustment in the program won’t mean that it will end all at once, officials say, and even more importantly it won’t mean that the Fed is anywhere near raising short-term interest rates.

Investors aren’t listening.

A wide range of indicators suggest that investors are starting to think the Fed might start raising short-term interest rates — now near zero — sooner than previously thought. Until recently many market indicators suggested investors expected the first rate increases in mid-2015, but now these indicators indicate investors think it could be sooner.

Read more...Analysis: Fed Likely to Push Back on Market Expectations of Rate Increase - Real Time Economics - WSJ

Thursday, June 13, 2013

Investors Backing Out of 'REO-to-Rent' Market via AOL Real Estate

For the past three years they have been swarming over the hardest-hit housing markets, buying distressed properties in bulk and pushing prices higher by double digits. The idea for these investors was not to buy and flip, but to hold and rent. Now some investors say that they have priced themselves out of the market.

"Higher prices are reducing returns on investment, and investors are responding by cutting back on their purchasing plans until conditions sort out," said Chris Clothier, a partner in and Premier Property Management Group, which commissioned a national survey of investors conducted by ORC International. "Fewer foreclosures, rising property values and competition from hedge funds are making it tough to find good deals on distress sales."

Nearly half the investors surveyed said that they planned to cut back on purchases of homes in the coming year; in a survey last August, just 30 percent said they planned to cut back. Only 20 percent of investors said they plan to increase purchases, compared with 39 percent who said they would last August. All this could have a significant impact on the housing recovery.

Read more...Investors Backing Out of 'REO-to-Rent' Market | AOL Real Estate

Economic Growth Drives Commercial Investments in Q1 of 2013 via NAR Research

Economic activity maintained grew at a steady pace during the first quarter of the year, as consumers and businesses focused on the year ahead. Gross domestic product rose 2.4 percent in the first quarter, as consumers opened up their wallets at the fastest pace since the fourth quarter 2010. Consumer spending increased 3.4 percent in the first quarter, lifted by a 9.1 rise in auto purchases, coupled with an equal advance in sales of recreational goods and vehicles.

With aging vehicles and with manufacturers rolling out technologically advanced and more fuel efficient new models, consumers are finding new cars attractive. Sales of cars in April totaled 651,644 units, a 3.1 percent increase year-over-year. Sales of light-duty trucks, which include SUVs, advanced 14.7 percent, benefiting from the soaring popularity of car-based cross-over vehicles, which recorded the strongest yearly gain in April, at 16.5 percent. Pick-up trucks also recorded solid sales growth, with the Ford F-Series leading the sales charts, followed by the Chevrolet Silverado.

Read more...Economic Growth Drives Commercial Investments in Q1 of 2013 via NAR Research

Apartments keep going up; no slowdown in sight via Real Estate Center at Texas A&M

With almost 25,000 apartments in the construction pipeline, Dallas ranks with Houston and New York among the top multifamily home building markets in the country.

There is no sign of a slowdown in apartment starts in North Texas and many other major U.S. markets. The 12-month total of apartment and condo starts was up more than 40 percent in April from a year earlier.

With almost 275,000 apartments under construction across the country, is it time to worry about too much new supply? “Despite what I often hear, I don’t think we are at the point where we are about to overbuild in the apartment industry,” says Mark Obrinsky, chief economist with the National Multi Housing Council.

He said demographics show there is demand for most of the apartments being built.

Read more...Apartments keep going up; no slowdown in sight via Real Estate Center at Texas A&M

Are renters here to stay? Spoiler alert: Experts say yes via HousingWire

Within the next 10 years, 5 to 6 million new renter households will be created, according to data from the National Association of Realtors.

Since housing crashed in 2008, renting households have jumped to a surprising 38 million, a number that is expected to continue rising to 41 million in the next two years, according to the U.S. Census Bureau.

In fact, only half of renters say they plan to own a home within the next five years. So what is behind this recent push in renting and why are experts confident it’s here to stay?

Read more...Are renters here to stay? Spoiler alert: Experts say yes | HousingWire

Wednesday, June 12, 2013

Solo Millennials—Implications for the Apartment Market via Axiometrics

In Eric Klinenberg’s “Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone,” there are some interesting statistics about Millennials, people in their 20s and 30s or born in the late 1980s to the early 2000s. Millennials are different from previous generations in that they tend to stay in school a little longer than their predecessors and they delay marriage and having children. This book is highly recommended reading for those in the apartment and student housing markets.

According to sociologist Michael Rosenfeld, they tend to establish their own households more quickly than their predecessors. Certainly, a fair number remain with their parents after college graduation but in 1950, only 1% of those aged 18-29 lived apart from their parents – these days, more than 40% do.

Notes Klinenberg: “In recent decades a growing number of twenty- and thirty-something’s have come to view living alone as a key part of the transition to adulthood. In large urban areas where it is most common, many young professionals see having one’s own home as a mark of distinction and view living with roommates or parents as undesirable at best (p. 30).” Klinenberg also notes that many Millennials are willing to pay a little extra to be on their own rather than live with a roommate.

Read more...Solo Millennials—Implications for the Apartment Market via Axiometrics

Percentage of loans paying at maturity dips: Trepp via HousingWire

The percentage of loans paying off their balloon rate registered 59.5% in May, the second lowest of the year, but was above the 12-month moving average of 55.3%.

This was more than five points below the April reading of 64.6%, according to Trepp.

By loan count, 69.1% of loans paid off. The 12-month rolling averge by loan count is now 61.8%.

"It might be tempting to attribute May's decrease to increasing Treasury yields and widening commercial mortgage-backed securities spreads, but that would be off base," analysts for Trepp said.

Read more...Percentage of loans paying at maturity dips: Trepp | HousingWire

In a Shift, Interest Rates Are Rising via

It has been a reliable fact of life for investors, corporations and ordinary borrowers: interest rates, for the most part, keep heading lower.

But all of that may be about to change. For prospective homeowners, the cost of mortgages has been going up in recent weeks. Governments are also facing the prospect of higher borrowing costs down the road, and they are projecting increases to their debt burdens. Savers with money in bank accounts, on the other hand, have the prospect of finally earning more than a pittance on their deposits.

The interest rate charged by lenders, often cited as the single most important factor behind economic decisions, has been steadily going down for most of the time since the early 1980s, and has fallen to historical lows since the financial crisis. Over the last few months, though, investors and banks have been demanding higher payments for their loans, pushing up interest rates and bond yields.

Read more...In a Shift, Interest Rates Are Rising -

ALN: Atlanta, Austin, DFW, Houston, Phoenix, San Antonio via Real Estate Center at Texas A&M University

ALN Apartment Data has released the May review of occupancy, effective rent and more for Austin, Dallas-Fort Worth (DFW), Houston and San Antonio.

For reference, Atlanta, Ga., and Phoenix, Ariz., are shown. The general overview includes properties in initial lease-up.

Read more...ALN: Atlanta, Austin, DFW, Houston, Phoenix, San Antonio via Real Estate Center at Texas A&M University

CMBS Remain a Viable Choice for Long-Term via

Demand for commercial mortgage-backed security is growing in response to upbeat forecasts for commercial real estate and an optimistic outlook by CRE executives. Markets are beginning to recover back to pre-recession levels, and low interest rates combined with rising property values and buyer demand are sending the CRE industry into “go-mode.”

With market observers projecting that new CMBS issuances could reach more than $100 billion in 2013, which is more than double that of 2012, there remains a need to clean-up the overhang from non-performing legacy CMBS before the industry can move forward scotch-free.

Read more...CMBS Remain a Viable Choice for Long-Term - Commentary Article -

Dallas, Houston Among Top-Searched Metros via

Apartment Guide, which shares information about retail properties to potential renters nationwide, has released data about moving patterns and the top searched metropolitan areas. Dallas and Houston ranked among the top 10 list, coming in third and fourth, respectively.

Dallas didn't fare quite so well when it came to top searched sister metros, however. This ranking determines where people most often move from and where they move to – statistics show that a higher number of individuals move from the Dallas to Houston metro region rather than vice versa.

Read more...Dallas, Houston Among Top-Searched Metros - Daily News Article -

Tuesday, June 11, 2013

New Austin apartments can't slow demand via Real Estate Center at Texas A&M

New apartment buildings are going up all over the Austin area, but it still might not be enough to slow an exploding rental market.

“As much as we’d like to see that effect pricing, it is not yet. They are still continuing to climb,” said Natalie Young, the manager at A+ Apartment Locators.

There was not much new construction in recent years when demand soared along with rental prices, but there are currently more than 16,000 new units under construction.

Read more...New Austin apartments can't slow demand via Real Estate Center at Texas A&M

Making the Right Decisions for Your Green Project via Multifamily Executive Magazine

You’ve decided to green-certify your property, and you’ve chosen your program. Now, you need to do the right things, in the right order, to get through the certification process with the least impact on your schedule and budget.

When you use a GPS on a trip, if you make a wrong turn, it adjusts and puts you back on the right path. There is no green building GPS that will self-correct as you go, so you have to make all the right decisions from the very beginning. When you make a wrong decision early in the process, it can cost you money, time, long-term energy costs, and increased maintenance for the life of the building. A similarly lost opportunity occurs if you wait until your design is almost finished to decide to certify or choose a program. At that point, you have fewer chances to improve performance, keep costs in line, and meet green program requirements. For all these reasons, it’s always better to design green from the start.

Read more...Making the Right Decisions for Your Green Project - Green Building, Building Envelope, Building Performance, Building Science, Energy Efficiency, Green Building, Green Standards, High-Performance Building, Hvac, Mechanical Systems, Performance Metrics, Post-Occupancy Performance - Multifamily Executive Magazine

S&P's Latest Delusion: It’s 'Increasingly Clear' Banks Won't Get Bailouts via Businessweek

Standard & Poor’s (MHP), saying that it is “increasingly clear” that the government may not bail out big banks in another crisis, downgraded JPMorgan Chase’s (JPM) credit rating outlook this morning to “negative,” bringing it into line with seven other key financial institutions.

Since the bank rescues of 2008, investors have assumed that the United States government and others around the world won’t let banks fail, lest they bring the economy down with them. That’s more or less still the consensus. Senators Sherrod Brown (D-Ohio) and David Vitter (R-La.) introduced a bill in April on the theory that the biggest legislation to come out of the crisis, the Dodd-Frank Act, hasn’t adequately solved the problem of “Too Big To Fail.” Bloomberg View argues that the largest U.S. banks get a taxpayer subsidy of $83 billion a year because of this perception, realized in the form of lower borrowing costs.

Read more...S&P's Latest Delusion: It’s 'Increasingly Clear' Banks Won't Get Bailouts - Businessweek

Surprise: Oil and gas drove Texas’ real GDP growth in 2012 via Biz Beat Blog

Despite the housing recovery, it was the stalwart oil and gas industry that drove the economies of the fastest-growing states, including Texas, last year.

Texas’ real gross domestic product — the total value of all economic activity adjusted for inflation — increased 4.8 percent in 2012, according to new statistics from the U.S. Bureau of Economic Analysis. The state ranked No. 2 nationally.

Read more...Surprise: Oil and gas drove Texas’ real GDP growth in 2012 | Biz Beat Blog

Singles and Living Single via AXIOmetrics

In 2012, author Eric Klinenberg released his book entitled “Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone.” In preparing this work, Klinenberg tapped into an array of studies, resources and his own research to come up with two ideas. First, human beings are social creatures. And second, these social creatures, more and more, are opting to be single.

According to Klinenberg’s research, unlike the middle of the 20th century, during which more people were getting married, these days, more than 50% of American adults opt to remain single.

Additionally, 31 million Americans (one out of every seven adults) live alone. Furthermore, he notes, people living alone make up 28% of all US household. In his words, it “means that they are now tied with childless couples as the most prominent residential type – more common than the nuclear family, the multigenerational family, and the roommate or group home.”

A few other interesting facts he brings into the discussion are that

Read more...Singles and Living Single via AXIOmetrics

CMBS risk is rising: S&P via HousingWire

Commercial mortgage-backed securities issuance rose to $39 billion, up from roughly $15 billion during the same period in 2012.

A majority of this issuance comes from conduit/fusion transactions, accounting for $23 billion of the 2013 CMBS total, according to Standard & Poor’s latest report.

"We believe these new deals — especially those issued during the second quarter — are riskier compared with 2013 and other recent vintage conduit/fusion deals," said analysts for S&P.

Read more...CMBS risk is rising: S&P | HousingWire

Monday, June 10, 2013

Survey: 67% of Renters Cite Lack of Assets as Hurdle to Homeownership via

A little more than half of American renters believe owning a home is a more sensible choice than living in rental housing, according to a research study from Fannie Mae’s Economic & Strategic Research Group.

To better gauge the future of homeownership and the current shift toward renting, Fannie Mae’s National Housing Survey took a look at renter attitudes and preferences in Q3 2012 to get an idea of their aspirations and expectations.

According to the findings, the majority of respondents believe renting has its advantages in terms of current finances and stress. When asked which situation would be better for their budget, 57 percent of renters surveyed chose “renting” over “owning,”

Read more...Survey: 67% of Renters Cite Lack of Assets as Hurdle to Homeownership

Most economists see Fed scaling back bond buys by year-end via Reuters

Most economists expect the Federal Reserve to scale back the size of its bond purchases, intended to prop up the economy, by the end of the year, and a sizeable number expect reduced buying as early as September, according to a Reuters poll.

Of 48 economists who answered a poll question on Friday about when they expected the Fed to cut back on the size of its debt purchases, 42 said they expected this by the end of 2013. Of those, 21 expect reduced purchases to be announced during the third quarter of the year, with 19 specifying the Fed's September policy meeting.

Read more...Most economists see Fed scaling back bond buys by year-end: Reuters poll | Reuters

Bank CRE Distress Levels Improving; Profits From REO Sales in Sight via CoStar Group

Distress levels on commercial real estate loans continued to improve for the nation's banks in the first quarter. Levels of past due and foreclosed CRE fell more than $6 billion to a combined $78.1 billion at banks. However, pockets of weakness (or opportunities, depending on your investment perspective,) continued across the country.

The aggregate amount of foreclosed properties dropped $949 million in the first quarter. Unlike in past quarters when multifamily properties made up the largest share of the decline of REO properties, this quarter the share of construction and development properties declined the most. Banks ended the quarter with an aggregate of $841 million less in C&D properties; $105 million less in nonresidential real estate and only $2.7 million less in multifamily properties.

Read more...Bank CRE Distress Levels Improving; Profits From REO Sales in Sight - CoStar Group

Friday, June 7, 2013

Mosquito Control Tips for Apartment Properties via Property Management Insider

Picnics and outdoor grilling traditionally mark each Memorial Day, but the holiday that signals the near end of spring and start of summer also is the beginning of mosquito season. Summer barbecues at apartment patios and evening walks can be disrupted or ended by the sting of one backyard pest that has generated much attention lately.

Last year was the second-worst outbreak of West Nile virus, which is transmitted to humans by the bites of infected mosquitoes. According to the Center for Disease Control (CDC), there were 5,674 cases – including a record 286 deaths – reported in the lower 48 states, District of Columbia, and Puerto Rico. Texas reported one-third of the outbreaks and as many deaths.

This year could be just as bad, depending on weather conditions. But apartments now have a new weapon in their arsenal to fight mosquitoes, and deployment is as easy as turning on the irrigation system.

Read more...Mosquito Control Tips for Apartment Properties | Property Management Insider

Q1 2013 Apartment Trends via ReisReports

Victor Calanog reports on the apartment market performance for Q1 2013. Here are the highlights:

* Apartment vacancy hit 4.3% at the end of the first quarter.

* Asking and effective rents grew by 0.5%

* Multi-family development is continuing to surge, bringing 150,000 units online in 2013.

Watch video...Q1 2013 Apartment Trends | ReisReports

Millennials Seek Apartments, Not Homes via

When looking at the economy, you can’t underestimate the importance of the housing sector. That was the overall message during a discussion of the apartment versus housing market at ULI’s Real Estate Finance and Investment 2013 conference here.

“There is nothing like economic growth to get you a job, get you out of the house, and get you into an apartment,” explained Richard Sinkuler, partner and global real estate markets leader of Ernst & Young.

Andrew Nelson, director of research and strategy at Deutsche Asset & Wealth Management, said that the economy is on an upward trajectory with fewer homes are underwater, consumer confidence rising, more construction jobs to build homes, and the manufacturing sector is making some recovery, he explained. “Tech and energy are very fundamental to our economy and are growing.”

Read more...Millennials Seek Apartments, Not Homes - Daily News Article -

Special Report: Apartment Rentals to Remain Healthy via Multi-Housing News Online

Multifamily experts were optimistic about prospects for the sector at the midyear forecast at the National Association of Real Estate Editors conference in Atlanta. Most locations won’t overbuild, single-family rentals are not overtaking the market and the Millennial generation is likely to usher in a longer-term interest in renting by choice, they said.

Speakers Mark Obrinsky, vice president of research & chief economist for the National Multi Housing Council, and Greg Willett, vice president of research and analysis for MPF Research, agreed that the forthcoming need for multi-family rental units will 300,000 to 4000,000 per year.

Read more...Special Report: Apartment Rentals to Remain Healthy | Multi-Housing News Online

Thursday, June 6, 2013

Apartment Market Statistics: June 2013 via Multi-Housing News Online

Bank lending increased across the board for multifamily properties, income-producing commercial real estate, and owner-occupied commercial real estate, according to Chandan Economics. And the recovery in large and mid-tier banks’ commercial property balance sheets continued into the third quarter, stated Sam Chandan, chief economist.

Apartment equity REITs showed a compound annual increase of 1.30 percent for one year, and 9.67 percent for five years, according to National Association of Real Estate Investment Trusts.

Housing starts for buildings with five or more apartments came in at a seasonally adjusted annual rate of 285,000 units in February 2013. This represented a 1 percent gain versus January, stated the National Association of Home Builders (NAHB). Overall, the recent permit numbers have been strong enough to support a five-plus starts rate in range of 285,000 over the next couple of months, said NAHB.

Read more...APARTMENT MARKET STATISTICS: June 2013 | Multi-Housing News Online

Rising Prices Make Homeownership Affordability More Unequal Across the U.S. via Trulia Trends

The Trulia Price Monitor and the Trulia Rent Monitor are the earliest leading indicators of how asking prices and rents are trending nationally and locally. They adjust for the changing mix of listed homes and therefore show what’s really happening to asking prices and rents. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do. With that, here’s the scoop on where prices and rents are headed.

Prices Up 9.5% Year-over-Year, and Rising in 98 of 100 Largest Metros

In May, asking home prices rose 1.1% month-over-month, seasonally adjusted. That’s slower than in previous months — asking prices rose 1.4% in each of February, March, and April (includes revisions) – but still at a very fast clip. Quarter-over-quarter, prices are up 4.0%, seasonally adjusted. Year-over-year, prices are up 9.5% nationally and are higher than one year ago in 98 of the 100 largest metros.

Read more...Rising Prices Make Homeownership Affordability More Unequal Across the U.S. | Trulia Trends

Fannie Mae Releases New Research Study: Renters Are Satisfied, but Continuing to Reach for Homeownership via Multi-Housing News Online

Fannie Mae’s Economic & Strategic Research Group released a new research study that investigates the impact of consumer attitudes toward renting and homeownership on the future of housing in America. Data from Fannie Mae’s National Housing Survey provides insights into whether current renters, particularly younger Americans, aspire to become homeowners and when they expect to achieve the goal of homeownership. Findings show:

-Ninety percent of aspiring renters expect to purchase a home in the future, even though most have ranked their renting experience favorably.

Read more...Fannie Mae Releases New Research Study: Renters Are Satisfied, but Continuing to Reach for Homeownership | Multi-Housing News Online

Construction Contracts Decrease in Area via

Though the metro region is seeing its fair share of cranes and construction, a recent report prepared by McGraw Hill Construction and released by Greater Houston Partnership points out that in April 2013, approximately $971.2 million contracts were awarded throughout the 10-county region. This compares to the $1.1 billion awarded in April, 2012.

Residential contracts were up 15.7%, while commercial contracts decreased by 47.3% in April 2013, compared to the same month last year. According to the report, the sharp year-over-year decline in commercial contracts can be attributed to a record high of $508.1 million contracts awarded in April 2012, the highest month of commercial contracts in over three years.

Read more...Construction Contracts Decrease in Area - Daily News Article -

Wednesday, June 5, 2013

Real Estate’s 2013 Pivot Points: Interest Rates, Gen Y, Health-Care Demand via WSJ

Low interest rates, increasingly aggressive lending and Generation Y’s housing preferences are among the top factors shaping the U.S. real estate market this year, according to a group of leading real-estate experts.

The Counselors of Real Estate, a Chicago-based global association of hundreds of real estate professionals and advisors, released the list Wednesday at the annual conference of the National Association of Real Estate Editors in Atlanta. The group conducts a survey of hundreds of its members each year to compile a ranking of the top 10 factors influencing real-estate markets.

The association’s chairman, Howard Gelbtuch, outlined the 10 factors in order for an audience at the Hilton Downtown Atlanta.

No. 10: Retail malaise and repositioning. While retailers and malls have withstood the growth of online shopping better than many observers expected, the mall industry increasingly is dividing into a handful of dominant properties in each city and several also-rans. Those struggling properties will need to be redeveloped at great cost.

Read more...Real Estate’s 2013 Pivot Points: Interest Rates, Gen Y, Health-Care Demand - Developments - WSJ

Rough Road Ahead? via Commercial Property Executive

Interest rates have bumped up recently with the 10-year Treasury yield increasing from 1.70 percent on April 30 to 2.16 percent on May 31. This has impacted interest-sensitive assets including REITs, which fell 6.56 percent last month according to the FTSE NAREIT All REIT Index compared with a gain of 2.34 percent for the S&P 500.

This has me thinking about the road ahead as the Federal Reserve eventually reduces and discontinues its bond-buying and begins to raise interest rates. The global financial system has become so accustomed to easy money that the eventual withdrawal of these policies, even gradually, could be rough, especially since so much of the credit markets are securitized and, by definition, subject to volatility.

Read more...Rough Road Ahead? | Commercial Property Executive

Dallas Beige Book June 5, 2013 via Dallas Fed

The Eleventh District economy expanded at a stronger pace over the past six weeks than in the previous reporting period. Manufacturing activity increased overall, and many contacts were more optimistic in their outlooks. Retail sales activity improved during the reporting period, and auto sales held steady. In the nonfinancial services sector, demand for accounting services was strong, legal firms reported modest growth, and most transportation services firms noted improvement. Staffing services contacts said demand was steady. The housing sector continued to improve, with further gains in sales and construction. Office and warehouse leasing activity remained steady. Financial institutions noted modest growth in loan demand, and energy activity improved during the reporting period. Drought conditions worsened across the Eleventh District. Prices remained stable at most firms, and employment levels were steady.

Most responding firms said prices were steady and they expect increases to remain modest for the remainder of the year. One exception is home prices, which have risen strongly due to pent-up demand and low inventories.

Read more...Dallas Beige Book - Dallas Fed

World Chasing U.S. Yield With 25% Deal Jump: Real Estate via Bloomberg

Singaporeans, South Koreans, Israelis and Norwegians are accelerating purchases of U.S. real estate as a growing economy and rebounding prices lure yield-hungry buyers from overseas.

International investors made $7.97 billion in U.S. commercial-property purchases this year through April, a 25 percent jump from the same time in 2012, according to Real Capital Analytics Inc. Their $27.5 billion in deals in all of last year was almost six times the $4.7 billion low in 2009, the research firm said.

With deals including the tallest buildings in Los Angeles and Minneapolis, cross-border buyers are contributing to a U.S. real estate recovery that has seen prices by some measures reach new peaks. Sellers are taking advantage of the rising values and demand. Blackstone Group LP, the second-biggest U.S. office landlord, has said it expects strong interest from sovereign-wealth funds for properties it plans to sell starting this year.

Read more...World Chasing U.S. Yield With 25% Deal Jump: Real Estate - Bloomberg

Texas Economic Indicators June 2013 via Dallas Federal Reserve

The Texas economy continues to expand, with employment growing at a 3.4 percent annual rate in April. Texas existing-home sales and single-family construction permits increased in April, while housing starts declined. Texas exports ticked up slightly in the first quarter of 2013. Manufacturing activity increased sharply in May, according to the Texas Manufacturing Outlook Survey.

Texas gained 31,300 jobs in April after losing 8,600 jobs in March. Current Texas employment stands at 11.12 million.

The Texas unemployment rate held steady at 6.4 percent in April. The Texas rate remains lower than the U.S. rate, which was 7.5 percent in April.

Read more...Texas Economic Indicators June 2013 via Dallas Federal Reserve

Tuesday, June 4, 2013

Behind the Rise in House Prices, Wall Street Buyers via

The last time the housing market was this hot in Phoenix and Las Vegas, the buyers pushing up prices were mostly small time. Nowadays, they are big time — Wall Street big.

Large investment firms have spent billions of dollars over the last year buying homes in some of the nation’s most depressed markets. The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out. Some are already wondering if prices will slump anew if the big money stops flowing.

“The growth is being propelled by institutional money,” said Suzanne Mistretta, an analyst at Fitch Ratings. “The question is how much the change in prices really reflects market demand, rather than one-off market shifts that may not be around in a couple years.”

Read more...Behind the Rise in House Prices, Wall Street Buyers -

Grants for permanent homes to 470 homeless Texas veterans via Real Estate Center at Texas A&M

Texas will receive $2,518,973 to assist its homeless veterans. Approximately 470 homeless veterans living on the streets and in shelters in Texas will soon find a permanent place to call home.

The grants announced are part of $75 million appropriated this year to support the housing needs of homeless veterans through the HUD-Veterans Affairs Supportive Housing (HUD-VASH) Program.

Veterans participating in the HUD-VASH program rent privately-owned housing and generally contribute no more than 30 percent of their income toward rent.

Read more...Grants for permanent homes to 470 homeless Texas veterans via Real Estate Center at Texas A&M

Amarillo salutes veterans with affordable housing via Real Estate Center at Texas A&M

The City of Amarillo is going to receive more than $100,000 to house a total of 70 veterans in 2013, which is 20 more than 2012. The program is called Veterans Affairs Supportive Housing (VASH).

Another Chance House in Amarillo, which is contracted by the VA, says vets are given up to $450 a month making sure they have enough money to pay all their bills.

Read more...Amarillo salutes veterans with affordable housing via Real Estate Center at Texas A&M

Senators Near Plan to Abolish Fannie Mae, Shrink U.S. Backstop via Businessweek

A bipartisan group of U.S. senators is putting the final touches on a plan to liquidate Fannie Mae and Freddie Mac (FMCC) and replace them with a government reinsurer of mortgage securities behind private capital.

The proposed legislation, which could be introduced this month, would require private financiers to take a first-loss position adequate to cover price declines as steep as those seen during recessions over the past century, according to a draft obtained by Bloomberg News.

The bill, which is being written by Tennessee Republican Bob Corker and Virginia Democrat Mark Warner with input from other senators, is still being drafted. As the first serious bipartisan effort to shape a new housing finance system, it could frame a discussion that is heating up as the market rebounds.

Read more...Senators Near Plan to Abolish Fannie Mae, Shrink U.S. Backstop - Businessweek

Monday, June 3, 2013

Student Housing’s Best, Worst Markets via Multifamily Executive Magazine

Real estate investors have increasingly focused on the student housing industry in search of more yield. Interest has been so intense, in fact, that questions have arisen about whether the industry is starting to overheat.

The sector runs the gamut from privately owned and managed off-campus housing to on-campus housing in some form of public–private partnership to university-owned and -managed dormitories. Additionally, from a market perspective, the sector competes with both conventional apartments in proximity to a university as well as the “shadow market,” the single-family rentals or “student slums” close to a university.

One of the reasons for heightened investor interest is the wave of Echo Boomers, or Gen Y, the largest generation in our nation’s history, which is expected to increase college enrollments—and, thus, bed demand­—by at least 10 percent by 2016.

Read more...Student Housing’s Best, Worst Markets - Student Housing - Multifamily Executive Magazine

April 2013 Multifamily Permitting Surpasses Long Term Average via Axiometrics

The U.S. Census Bureau posted its April residential permitting numbers by metropolitan statistical area (MSA) on Thursday, May 16. Privately-owned housing units authorized by building permit in April, measured on a seasonally adjusted annual rate (SAAR), were 1,017,000. This represented an increase of 14.3% from the revised March rate of 890,000 and was 35.8% above the April 2012 estimate of 749,000. During April 2013, annual multifamily (MF) permits at the national level increased by 43.5% from the comparable period a year ago. With the April 2013 MF permit number measuring 305,119 units, annual MF permitting has now been above 200,000 for 18 consecutive months and has edged past its long-term average monthly rate of 290,000. Despite only moderate job growth nationally, developers and investors are pursuing multifamily deals in numerous markets where local fundamentals are still stable to improving. The Census Bureau reports that annual starts have matched the long-term monthly average around which they have typically hovered for the past several years, with the exception of during the great recession. It remains to be seen if the headwinds to the national economy from federal spending cuts, exacerbated by the sequestration, will dampen enthusiasm for the multifamily sector.

Read more...April 2013 Multifamily Permitting Surpasses Long Term Average via Axiometrics

Trepp: US CMBS Delinquency Rate Ticks Up In May via MNI

The delinquency rate on loans underlying commercial mortgage-backed securities rose modestly in May after posting its lowest level in two years in April, data analytics firm Trepp said on Monday.

Trepp reported that the percentage of loans 30+ days delinquent or in foreclosure rose from 9.03% in April to 9.07% in May but is still below the 9.50% seen in March.

"The four basis point increase comes on the heels of a 47 basis point drop in April, which was also the biggest one month dip since Trepp began publishing the number in the fall of 2009," Trepp said, adding that the resolution of distressed CMBS loans was a "major factor" in the lower delinquency rate the past few months.

Read more...Trepp: US CMBS Delinquency Rate Ticks Up In May | MNI

Disaster Recovery Guide for Multifamily Communities [Infographic] via Property Management Insider

How prepared is your apartment community if disaster strikes? According to the American Red Cross, forty-five states and territories of the United States are at moderate to very high risk for earthquakes. This includes every region of the country. The National Apartment Association reported that when the EF5 tornado (receiving the highest strength rating on the damage scale) rampaged through Joplin, Missouri on May 22, 2011, it destroyed 8,400 residences, 18,000 cars and 450 businesses. Disaster recovery was estimated to range from $2.2 billion to $3 billion. For a 138-unit apartment community that survived the event, rehabilitation costs rose to $74,000 per unit. Total natural disaster costs in the U.S. that year were assessed at $365.6 billion.

Regardless of your region’s propensity for disaster—be it tornadoes, earthquakes, hurricanes, floods, wildfires or severe storms—the steps for preparedness and recovery largely remain the same. Craig Guillot reported in Multihousing News that, “The most important part of disaster and emergency preparedness is that it be made a continuous process.”

Read more...Disaster Recovery Guide for Multifamily Communities [Infographic] | Property Management Insider