Wednesday, February 25, 2015

Most millennials rent but lack renters insurance via CNBC.com

Millennials are more likely to rent than to own their homes. But nearly six in 10 don't have renter's insurance, according to a new survey.

The Insurancequotes.com survey, conducted by Princeton Survey Research Associates, found 60 percent of 18- to 29-year-olds are renters—compared with just 36 percent of all Americans. But the majority of them lack coverage.

"I think that millennials just don't take the time to get renter's insurance," said Dick Power, a certified financial planner and founder of the Walpole, Mass.-based investment advisory firm Power Plans. "They don't have a concept of risk."

Read more...Most millennials rent but lack renters insurance

MPF: San Antonio multifamily trends 4Q 2014 via Real Estate Center at Texas A&M

Like other major metros in Texas, San Antonio’s apartment sector showed strong growth coming out of the recession. However, unlike those other metros, San Antonio already appears to be reverting to a slow growth pattern that is more consistent with its own historical performances, according to MPF Research.

Structurally, the San Antonio metro is a more moderate-growth metro — heavy on government-related jobs, but not on large private employers.

Read more...MPF: San Antonio multifamily trends 4Q 2014 via Real Estate Center at Texas A&M

Tuesday, February 24, 2015

Competition to Finance Multifamily Will be Keener than Ever in ’15 via Multi-Housing News Online

Multifamily lending is the still dominated by Fannie Mae and Freddie Mac, but other lenders are increasingly important in the space, according to a recent report by JLL. The GSEs posted a slightly smaller market share in 2014 compared with the previous year, according to Faron Thompson, leader of JLL’s multifamily debt financing platform. “Other lenders are becoming competitive, but the agencies will maintain their edge with the introduction of new products including a small balance loan initiative, manufactured housing program, tax-exempt loans and value-add products,” he said.

All together there was about $55 billion in lending for multifamily projects and acquisitions in 2014, and JLL expects this year’s total to be at least that much, if not more. According to the company’s latest research, the investment community remains enamored with the sector, leading lenders to duke it out to secure debt yields.

Read more...Competition to Finance Multifamily Will be Keener than Ever in ’15 | Multi-Housing News Online

D-FW has one of the country’s lowest homeownership rates via Dallas Morning News

Dallas-Fort Worth is on its way to becoming a city of renters.

The D-FW area is among the major U.S. cities with the lowest percentage of homeowners, according to a new report by the Department of Commerce’s Census Bureau.

Only 56.3 percent of D-FW residents were homeowners in the fourth quarter of 2014. That compares with a nationwide homeownership rate of 64 percent.

Read more...D-FW has one of the country’s lowest homeownership rates | Dallas Morning News

Monday, February 23, 2015

Texas Manufacturing Activity Remains Flat in February, Says Dallas Fed Survey via Dallas Fed

Texas factory activity posted a second month of no growth in February, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

Texas produces more than 11 percent of total manufactured goods in the United States, ranking second behind California in factory production.

The production index—a key measure of state manufacturing conditions—remained near zero (0.7), indicating output was essentially unchanged from January levels.

Read more...Texas Manufacturing Activity Remains Flat in February, Says Dallas Fed Survey - Dallas Fed

Apartment Construction Boom Could Extend Well Into 2016 via CoStar Group

One of the most popular topics of discussion at commercial real estate conferences over the last few months is when will the current rush of U.S. apartment construction slow down -- and recent government numbers and commentary from CoStar economists suggest that the answer may not be any time soon.

Although the number of new single-family homes starting construction dropped in January 2015, construction starts on multifamily structures with five or more units increased to 372,000, up more than 12% from December 2014, and 24.5% higher than 12 months ago, even as rental vacancies remained at their lowest level in more than two decades.

Read more...Apartment Construction Boom Could Extend Well Into 2016 - CoStar Group

Affordable Multifamily Supply is Squeezed by Development in the Conventional Market via Property Management Insider

As fundamentals remain strong in the U.S. apartment market, developers continue to ramp up construction of conventional properties. But his building spree could be having an inadvertent effect on the affordable housing sector – and not in a way that results in additional affordable units. Instead, the historically high levels of conventional apartment construction have driven up development costs. And that could further squeeze affordable development, as funding for affordable apartments is not rising to offset the higher price tag to build. All the while, demand for affordable supply continues to be high, as wage growth is limited and the number of renting households grows.

Read more...Affordable Multifamily Supply is Squeezed by Development in the Conventional Market | Property Management Insider

D-FW apartment residents are paying more than ever for rent via Dallas Morning News

Dallas-Fort Worth apartment renters just can’t catch a break.

In January average rents in the area jumped by more than 5 percent from a year ago, according to a new report from Axiometrics Inc.

The rent hikes in the Fort Worth area were even larger – up 6.4 percent on an annualized basis.

“What’s amazing about these figures is that they’re occurring with a continued stream of new supply,” Stephanie McCleskey, Axiometrics vice president of research, said in a new report. “These numbers speak to the continued strong job growth throughout the Dallas-Fort Worth metro.”

Read more...D-FW apartment residents are paying more than ever for rent | Dallas Morning News

Wednesday, February 18, 2015

Apt. Gains Continue into 2015 via GlobeSt.com

January’s numbers for the apartment market nationally were the strongest for the month since the recession ended, Axiometrics said Tuesday. The month yielded annual effective rent growth of 4.9% and occupancy of 94.6%. By comparison, last January’s annual effective rent growth for multifamily was 202 basis points lower at 2.9%.

“We expected rent growth to moderate in 2015 after the spectacular growth of 2014,” says Stephanie McCleskey, VP of research at Dallas-based Axiometrics. Yet January’s results speak to “an apartment market that is continuing the strength” of the past 12 months.

Read more...Apt. Gains Continue into 2015 - Daily News Article - GlobeSt.com

Tuesday, February 17, 2015

O'Connor: Houston apartment overview Feb. 2015 via Real Estate Center at Texas A&M

O'Connor and Associates submarket apartment data for February 2015 are available. Below is a chart of the eight submarkets with the highest number of units in the region.

Read more...O'Connor: Houston apartment overview Feb. 2015 via Real Estate Center at Texas A&M

Apartment rental rates in Houston soon to be less expensive via KPRC 2 Houston

Getting an apartment in Houston is about to get less expensive and that's good news for renters. But the reason behind the drop is concerning.

You're bound to find large apartment communities, popping up across the Houston metro area and hundreds more are expected to be completed over the next year. And because of that industry analysts expect rent rates to drop and in some cases, it's already happening.

Read more...Apartment rental rates in Houston soon to be less expensive | News - Home

Monday, February 16, 2015

APARTMENT MARKET STATISTICS: February 2015 via Multi-Housing News Online

In the third quarter, $27,499,153 worth of multifamily properties were transacted, down slightly from the $28,608,216 in properties that exchanged hands in the second quarter, according to data supplied by PPR, a Costar company. Weighted average price fell to $144,149 per unit in the third quarter compared to $124,768 in the previous quarter. However, this level is still the highest level since the third quarter.

According to the Mortgage Bankers Association, total debt outstanding increased for depository institutions, from $317.6 billion to $278.2 billion, while falling for the Government Sponsored Enterprises from $251.8 billion to $236.4 billion.

Read more...APARTMENT MARKET STATISTICS: February 2015 | Multi-Housing News Online

Loan Maturities Loom for Multifamily Financing via Multifamily Executive Magazine

As 2015 dawns, many multifamily investment professionals are letting out long and heartfelt sighs of relief as the heady days of the recession finally fade into the rearview mirror.

The engine of the U.S. economy is once again a shining example to the rest of the world. Public indices are breaking records, housing starts are increasing, unemployment is decreasing, and consumer confidence is high.

With all this positive news, multifamily investors may be tempted to view the future with rose-colored glasses, but, first, they have to consider an approaching specter of the past: a 72% increase in loan maturities in 2015, mainly driven by the easy credit boom in 2005.

Read more...Loan Maturities Loom for Multifamily Financing | Multifamily Executive Magazine

Houston Economic Indicators February 2015 via Dallas Fed

The Houston Business-Cycle Index decelerated to 4.3 percent growth in December after rising a revised 5.8 and 7.2 percent in November and October. While slower than the preceding five months, December job growth was still higher than Houston’s historical average. It takes about two to four months for swings in energy prices to affect Houston’s aggregate employment, so the response to lower oil prices probably has not been observed yet. However, the construction boom in refining and petrochemicals, a healthy real estate market and the growing U.S. economy will buttress the region against volatility in energy prices. Thus, the Houston outlook, while substantially softer, remains positive.

Read more...Houston Economic Indicators February 2015 via Dallas Fed

Experts: Unaffordable rents here to stay via HousingWire

Unaffordable rents are making it hard for people to save for down payments, and they aren’t likely to ease up for at least two years, according to the latest Zillow Home Price Expectations Survey sponsored by Zillow and conducted quarterly by Pulsenomics.

More than half (52%) of the respondents with an opinion on this issue said the market will correct the nation’s soaring rents over time, and no government intervention is required. About one-third (35%) of respondents said rising rents are not a problem.

Read more...Experts: Unaffordable rents here to stay | 2015-02-13 | HousingWire

Friday, February 13, 2015

Renters Insurance: Top 10 Questions Residents and Landlords are Asking via Property Management Insider

Demand for renters insurance has risen since 2008 when the U.S. economic landscape changed. What’s traditionally been more acceptable in the single-family housing vertical is gaining traction in the apartment industry. Many properties are encouraging residents to take out policies – in some cases, it’s becoming a part of the lease agreement.

IBISWorld, an industry research engine, predicts that annual revenue from renters insurance will top $601.1 million by 2018, up from $545 million two years ago.

As renters insurance becomes more visible to the apartment industry, many are asking just what the protection can do for them.

Read more...Renters Insurance: Top 10 Questions Residents and Landlords are Asking | Property Management Insider

ALN Monthly Newsletter February 2015 via ALN Apartment Data

ALN Data just released their January 2015 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 February 2015 via ALN Apartment Data

Tuesday, February 10, 2015

Hedging the Houston Apartment Market via Property Management Insider

The stunning decline in oil prices during the past year has Houston real estate investors on edge. The obvious worry is that slower employment growth will reduce demand for commercial and residential real estate. As a result of weakening demand, the pace of rent and revenue growth is expected to slow. So given this event-driven risk, what is the best way to hedge your Houston exposure?

First, you can do nothing. Seriously. Per the chart above, the current West Texas Intermediate (WTI) crude oil price is nearing the long-term average since 1984, which should give us some confidence the bottom is near. With that being said, given the supply glut, the market is still trying to find a bottom and could easily overreact, pushing prices for a barrel of crude oil into the $30s.

Read more...Hedging the Houston Apartment Market | Property Management Insider

Record Sales Volume and High Prices for Apartments in 2014 via National Real Estate Investor

Prices for apartment properties rose again in 2014 as investors bought a larger volume of properties than they did even in 2007—the biggest year of the last real estate boom for apartments.

“Investor demand for multifamily has not wavered at all,” says David Young, managing director for JLL.

The market for apartment properties has matured well past the recovery from the Great Recession. Investors are looking beyond the safest core markets to find higher yields from their investment. They are also looking much more deeply into the individual details of the properties they buy—from the local employment outlook to parking in the neighborhood.

Read more...Record Sales Volume and High Prices for Apartments in 2014 | Multifamily content from National Real Estate Investor

Prime Working-Age Population Growing Again via Calculated Risk

Last year, I posted some demographic data for the U.S., see: Census Bureau: Largest 5-year Population Cohort is now the "20 to 24" Age Group, Decline in the Labor Force Participation Rate: Mostly Demographics and Long Term Trends, and The Future is still Bright!

I pointed out that "even without the financial crisis we would have expected some slowdown in growth this decade (just based on demographics). The good news is that will change soon."

Read more...Calculated Risk: Prime Working-Age Population Growing Again

National Apartments.com Annual Survey Reveals 2015 Moving Plans for Renters via MultifamilyBiz.com

While rents continue to rise around the country, the rate of growth is slowly decreasing. According to CoStar, the real estate industry's leading provider of information, analytics and online marketplaces, the average cost of rent nationwide increased by 0.64 percent to $1,194 a month in the fourth quarter of 2014—down from a .89 percent increase the previous quarter. At the same time, demand for apartments remains strong despite a slight uptick in the vacancy rate to 4.7 percent in the fourth quarter of 2014 from 4.3 percent the previous quarter. CoStar predicts new apartment supply will also peak this year at more than 300,000 units. Apartments.com conducted its annual survey of more than 5,200 renters nationwide to determine how the healthy rental market would affect their moving plans this year. The survey reveals why renters are choosing to move or stay in their apartments, why more homeowners are turning to renting and the most popular apartment amenities.

Read more...National Apartments.com Annual Survey Reveals 2015 Moving Plans for Renters | MultifamilyBiz.com

Monday, February 9, 2015

Texas rig count falling by the hundreds as OPEC cuts U.S. forecast via Dallas Business Journal

More than 200 drilling rigs were taken out of service in Texas in the past two weeks as crude oil prices hovered between $45 to $50 a barrel, according to Baker Hughes.

Looking back a year ago, when crude oil selling at $100 a barrel Texas had 845 rigs going compared to 654 operating now.

This is just one way to gauge what's going on in the oil patch. Then consider that the Organization of Petroleum Exporting Countries projected a reduction in U.S. crude oil production of 130,000 barrels per day in 2015.

Read more...Texas rig count falling by the hundreds as OPEC cuts U.S. forecast - Dallas Business Journal

Why Millennials are Migrating to the Suburbs via Property Management Insider

Away from the neon and glitter, the street lights in the ‘burbs are far from flickering. Submarkets close to city centers and farther away are catching the attention of many, including those same millennials who some expected would fill downtown pads yet have been priced out of the city core.

Inner-ring suburbs are becoming desirable areas for new college graduates and others who are climbing social and economic ladders. Many are seeing the value of live/work/play lifestyles synonymous with downtown living being incorporated into suburban settings.

Despite popular belief, the suburbs are growing

The heartbeat of the suburbs is beating strong with help from the millennials

Read more...Why Millennials are Migrating to the Suburbs | Property Management Insider

Austin Economic Indicators February 2015 via Dallas Fed

The Austin economy grew at a stable pace in December. Jobs expanded at a modest annualized rate of 0.7 percent, while the unemployment rate fell sharply to 3.7 percent. Housing markets remained steady, with permits and median home price appreciation indicating strong momentum moving into 2015. Austin-area manufacturing picked up at the end of 2014, with production and volume of new orders accelerating.

The Austin Business-Cycle Index grew at an 8.3 percent annualized rate over the second half of 2014. While this pace dipped slightly from 8.8 percent in the first half of the year, it remains more than 3 percentage points above the 30-year average. Job growth in the second half of the year was a below-average 2.7 percent, but a 0.4 percentage-point drop in the unemployment rate from June to December contributed to continued gains in the index.

Read more...Austin Economic Indicators February 2015 via Dallas Fed

Is Vinyl Plank Flooring the Latest Apartment Trend? via Property Management Insider

The apartment industry is finding better ways to keep from getting floored by high turnover costs when it comes to providing effective walkable surfaces under residents’ feet.

Hard-surface floors are replacing many carpeted areas in apartments, and going down by offering long-term savings to property owners and a more stylish look for renters. Vinyl plank is fast covering entire units and complementing other floors that have traditionally been topped with carpet.

Many high-end styles of plank have the look and feel of stone, wood and ceramic tile. To steal a phrase from the World Floor Covering Association, this isn’t your grandmother’s kitchen flooring.

Read more...Is Vinyl Plank Flooring the Latest Apartment Trend? | Property Management Insider

Friday, February 6, 2015

The Multifamily Juggernaut via Multifamily Executive Magazine

National Association of Home Builders tax and policy expert Rob Dietz looks at recent data from the Census Bureau and Department of Housing and Urban Development Survey of Market Absorption of Apartments (SOMA), whose topline finding is that completions of privately financed, unsubsidized, unfurnished rental apartments in buildings with five or more units totaled 171,500 residences for the four quarters ending with the second quarter of 2014, a 47% increase from the prior four quarter total.

That's an amazing one-year gain, and underlying that headline is the fact that the juggernaut includes only market-rate, unfurnished apartments, while condos and other types of multifamily, such as LIHTC units, have languished at lower than normal levels. Dietz writes:

Read more...The Multifamily Juggernaut | Multifamily Executive Magazine

NAR Research: Expectations and Market Realities in Real Estate 2015 via realtor.org

As 2015 gets underway, many investors are more optimistic than they have been in years. Economic growth has been increasing, job growth has been improving, and consumers have been given a boost as gasoline prices have dipped nationwide. Compared to the markets and financial systems in other developed countries, the U.S. economy looks generally healthy.

With respect to commercial real estate investment, interest rates are still low and fundamentals continue to improve. Volume and pricing have been increasing, especially for high-quality properties in the coastal markets, but we have also seen high values and prices in more secondary and tertiary markets.

This report gives commercial investors the information they need to make forward-looking changes to the way they approach today's market, focusing on:

Read more...NAR Research: Expectations and Market Realities in Real Estate 2015 | realtor.org

Thursday, February 5, 2015

Dallas-Fort Worth leads U.S. metro areas in job creation via Dallas Morning News

The Dallas-Fort Worth area added more jobs than any other metropolitan area in 2014, a feat it hadn’t achieved in at least two decades.

D-FW gained 136,900 jobs last year, followed by the New York area with 129,000 jobs, according to data released Wednesday by the U.S. Bureau of Labor Statistics. The Houston area was No. 3, with 120,600 jobs. The figures are not seasonally adjusted.

December was the first time that D-FW has ranked No. 1 in calendar-year net job growth since at least 1990, when the BLS began compiling comparable state and local records. Texas also led the nation in job creation last year, adding 457,900 jobs.

Read more...Dallas-Fort Worth leads U.S. metro areas in job creation | Dallas Morning News

Fight Back: 5 Tips to Protect Against Bed Bugs via Property Management Insider

New information on the apartment industry’s Public Enemy No. 1 is a reminder that vigilance is Job One.

A recent report identifies that bed bugs are capable of transmitting the parasite that causes Chagas disease, which the Centers for Disease Control (CDC) lists as an emerging infectious disease. Bed bugs have been found to carry Trypanosoma cruzi, or T. cruzi, the parasite that causes Chagas disease. While these are no typical household names, they are terms to be reckoned with.

With Chagas disease, parasites nest undetected in humans and cause organs to fail over time. Chagas disease has largely been reported in rural or poverty-stricken areas of Latin America from transmission of the parasite through 130 species of blood-feeding insect vectors.

Now, add bed bugs to the list.

Read more...Fight Back: 5 Tips to Protect Against Bed Bugs | Property Management Insider

Austin rents ease as new units come into market via Real Estate Center at Texas A&M

Central Texas apartment dwellers are about to get some relief in 2015, as thousands of new units enter the market and ease the metro area’s demand crunch.

More than 10,000 apartment units opened in the metro area last year, and another 8,000 or more units are expected to enter the market this year, according Charles Heimsath, president of Capitol Market Research.

The boom in apartment supply dropped the area’s occupancy rate to 94 percent in the last half of 2014 — the lowest occupancy level in more than three years, and nearly 4 percent below the recent high of 97.8 percent in June 2012.

Read more...Austin rents ease as new units come into market via Real Estate Center at Texas A&M

Monday, February 2, 2015

Texas Economic Update: January 2015 via Dallas Fed

In this short video, Mine K. YĆ¼cel, Dallas Fed senior vice president and director of research, provides an update on Texas job growth in 2014 and outlines the Dallas Fed’s forecast for Texas job growth in 2015. She also addresses the impact of falling oil prices on the state's economy.

Watch video...Texas Economic Update: January 2015 - YouTube

Can San Antonio’s Apartment Sector Catch Up With Its Texas Peers? via Property Management Insider

San Antonio has been the consistent laggard among Texas’ major apartment markets. Will that change at all in 2015? And will the state’s declining energy fortunes have any impact on San Antonio?

Watch video...Can San Antonio’s Apartment Sector Catch Up With Its Texas Peers? | Property Management Insider