Friday, September 27, 2013

The Top 5 Factors Resulting in Resident Loyalty via Property Management Insider

When it comes to maintaining and increasing resident retention, we seem to put a lot of focus on why our residents are not loyal to us, but what we should really be asking ourselves is “What am I doing right?” When you identify who your loyal residents are, you’ll usually find there are five common factors that correlate with their loyalty. We’ve listed them below for your convenience:

1. You Ask for AND Listen to Resident Feedback
You ask the hard questions and listen to their needs, wants, and concerns. You take time to listen to their desires and honest feedback. You then work to provide them with what they need or want in a home. You show them that you care about them, and caring builds trust. When you implement changes and improvements based on resident feedback, you cultivate resident loyalty, and practically, increased resident retention.

Read more...The Top 5 Factors Resulting in Resident Loyalty | Property Management Insider

Interest Rate Outlook Points to Higher Yields via

Beyond the decision to extend its program of asset purchases, what were the most important takeaways from the September FOMC meeting? First and foremost, central bankers don’t yet believe the recovery has found its sea legs. They described the trends that have prevailed under their current interventions as “… consistent with growing underlying strength in the broader economy.” But they also described further rate increases as a threat to that recovery. In the housing market, in particular, they are not ready to wager that the rebound has independent momentum. If it’s taking flight on the market distortions behind cheap money, it may not survive anything but rock-bottom borrowing costs.

Reigning in the Long-Term Forecast

The Fed’s basic argument for accommodation is not in widespread dispute. The economy is growing slowly in the post-crisis era, below its potential rate, and is projected to remain sluggish in the near- and medium-term. The tepid pace of job creation is an even greater source of frustration. Unemployment rates are down from a year ago, but sliding labor participation accounts for too much of that result. Even with subdued inflation, real household incomes are declining.

Read more...Interest Rate Outlook Points to HIgher Yields - Chief Economist Article -

Thursday, September 26, 2013

Good News: MF Markets Forecast to Outperform Long-Term Averages via

Axiometrics Inc. forecasts that the multifamily sector in many US markets will continue outperforming their long-term averages. Specifically, some of the top-performing larger markets include Phoenix, Houston, Dallas, Atlanta, Charlotte, and Austin. Development in these markets has been strong but is not forecast to significantly impact the market fundamentals. Recovering employment growth has kept demand strong in these markets.

Read more...Good News: MF Markets Forecast to Outperform Long-Term Averages - Daily News Article -

Wednesday, September 25, 2013

Does Going Green Pay for Commercial Real Estate? via World Property Channel

The prominent role of real estate is increasingly recognized in the wider debate on climate change, and in today's society it is impossible to place real estate outside the context of the environment. Commercial and residential buildings account for a significant portion of carbon emissions and various legislation on both a national and international level is resulting in fundamental changes to building specifications and how buildings are managing to assist minimizing the negative impacts.

However, green buildings remain the exception rather than the norm and sustainability goals are easier to announce than to achieve.

Read more...Does Going Green Pay for Commercial Real Estate? - WORLD PROPERTY CHANNEL Global News Center

Commercial Real Estate Boils Down to Jobs via

At Transwestern's Sept. 24 Twitter conference, "State of CRE," Chip Clarke underlined a basic premise; namely that geographic areas producing more jobs will end up with more real estate activity.

In answering the question about hottest cities for commercial real estate investment, Clarke tweeted that those job-creating cities are seeing the best CRE activity. As such, its "hard to top Houston or San Francisco for job creation. Obviously, NY remains strong from investment standpoint."

Read more...Commercial Real Estate Boils Down to Jobs - Daily News Article -

Young Renters Filling Class B and C MF via

Even as the unemployment figure continues inching downward, one demographic isn't necessarily benefitting. Axiometrics Inc., in a recent newsletter, points out two things.

First, even with a slight dip in the unemployment rate (August figures from the Bureau of Labor Statistics reported 7.3% in unemployment), the unemployment rate for those 20-24 years of age isn't improving at the same rate as it is 25-34 years old.

And second, the higher unemployment among this demographic is the reason why younger renters are signing leases at class B and class C apartments.

Read more...Young Renters Filling Class B and C MF - Daily News Article -

Tuesday, September 24, 2013

August Employment Gains and Unemployment Rate Disappoint via Axiometrics

August job gains were weak yet the national unemployment rate ticked down. While some news outlets reported August’s employment data as a “mixed bag”, the story is really bad news on two fronts. The U.S. economy continued to limp along with unremarkable gains in August. The Bureau of Labor Statistics reported that total nonfarm seasonally adjusted (SA) payroll employment gained 169,000 jobs in August, well below the consensus forecast of 180,000 jobs. In addition, not only did net hiring miss expectations for last month but the job gain totals for June and July were revised to show 74,000 fewer positions added than previously reported. The change in total nonfarm payroll employment for June was decreased from 188,000 to 172,000, while July was revised downward from 162,000 to 104,000. Employers have added an average of just 148,000 jobs per month in the past three months, well below the 12-month average of 184,000.

Read more...August Employment Gains and Unemployment Rate Disappoint Multifamily Starts Slowing via

The single-family housing sector is showing signs of improvement, while the multifamily sector seems to be slowing, according to Research. The firm’s senior principal and economist Peter Muoio, Ph.D., reports that the Census Bureau’s August housing starts data shows that multifamily starts decreased from July, while single-family starts have remained steady since 2009.

Muoio says that total starts measured a seasonally adjusted annual rate of 891,000, just 0.9% above July’s downwardly revised estimate. “Total housing starts had been growing, albeit slowly, during 2011 and 2012, but hit a snag earlier in 2013 as the national economic recovery slowed and interest rates rose.”

Read Multifamily Starts Slowing - Daily News Article -

Multifamily Trends | 4 of the Latest Trends in Apartment Amenities via Multifamily Blogs

Remember when pools and covered parking were worth bragging about in apartment ads? Today’s renters are demanding, and receiving, a great deal more. Amenities vary quite a bit from city to city, but some of what’s trending now will very likely become standard in your neighborhood soon enough.

Here is a compilation of the top five apartment amenities that you didn’t know your renters needed.

Blazing fast connections

A business center is just not enough anymore. The new generation often works from home, so they need high-speed Wi-Fi everywhere and strong cellular signals for their smartphones. In larger cities, renters routinely ask free wireless and Cat-5 cabling in the apartments. Popular amenities that are becoming standard are docking stations for iPods. Landlines and entertainment centers just don’t matter when mobile devices deliver online movies, an app for everything and social networks… all of which require as much bandwidth as they can get.

Read more...Multifamily Trends | 4 of the Latest Trends in Apartment Amenities - Multifamily Blogs

Monday, September 23, 2013

Texas wind power growing fast via Dallas Business Journal

Texas plans to add 6,000 megawatts of wind power to the electric grid in the next several years, a 58 percent increase over what blows in today.

The Electric Reliability Council of Texas had about 10,570 MW of wind power available as of Aug. 31, according to ERCOT and that number could jump to 11,255 by year’s end.

Going back to 2007, the state has added more than 5,000 MW of wind power, a 120 percent increase.

Read more...Texas wind power growing fast - Dallas Business Journal

Regional Growth Accelerates Slightly via Dallas Fed

Regional economic activity rose at a slightly faster pace during the past six weeks. Employment growth picked up in July, and the August reading of the Texas Service Sector Outlook Survey (TSSOS) suggested a pickup in activity, particularly in the retail sector. Export growth was robust in July after pausing in June, and energy activity strengthened.

Texas’ employment growth was quite volatile in the first part of the year but has settled at roughly the long-run average of 2 percent since 1990. However, federal government payrolls continue to decline as a result of the sequester, holding back employment growth in metros with high military or health care concentrations—such as San Antonio and El Paso.

Read more...Regional Growth Accelerates Slightly - Dallas Fed

New Construction Starts on the Rise in August with Multifamily Housing on Upward Track, Jumping 12%, via

At a seasonally adjusted annual rate of $490.2 billion, new construction starts in August advanced 2% relative to July, it was reported by McGraw Hill Construction, a division of McGraw Hill Financial. Residential building stayed on the upward track, and nonbuilding construction (public works and electric utilities) rebounded after its loss of momentum in July. At the same time, nonresidential building retreated from its improved July amount, continuing the up-and-down pattern that's been present during 2013. For the first eight months of 2013, total construction starts on an unadjusted basis came in at $329.4 billion, up 1% from the same period a year ago. If electric utilities are excluded from the year-to-date statistics, total construction starts in the first eight months of 2013 would be up 10%.

Read more...New Construction Starts on the Rise in August with Multifamily Housing on Upward Track, Jumping 12%, - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

No Bubble In Multifamily Values, According to Freddie Mac via CoStar Group

Renter household formation has outpaced owner household growth during the past few years, spurring a huge increase in multifamily property sales and new construction.

Despite the boom in multifamily sales and development, Freddie Mac's latest Economic and Housing Market Outlook found that residential property values "remain consistent with fundamental economic forces in the housing market," and that the rate of appreciation for multifamily property values moderated over the past year.

Many investors have made note of the cap rate compression in the multifamily space. The American Council of Life Insurers (ACLI) reports cap rates on apartments with new mortgages made by life insurers have fallen, dropping from 8.9 percent in the first quarter of 2003 to 5.77 percent in the second quarter of 2013, a 35 percent decline and the lowest recorded by ACLI since the series’ inception in 1965.

Read more...No Bubble In Multifamily Values, According to Freddie Mac - CoStar Group

Thursday, September 19, 2013

August 2013 Apartment Market Summary via Axiometrics

After a slight uptick in annual effective rent growth in May and June, the growth rate began to moderate once again in August. For the month, annual effective rent growth measured 3.20%; occupancy reached Axiometrics’ forecasted rate of 94.9%.

In line with slowing annual effective rent growth at the national level during August, Class A and B properties also showed signs of moderation for the month. Comparing August 2012 to August 2013, both Class A and B properties decreased in annual effective rent growth, from 3.70% to 2.95% and 3.43% to 3.24%, respectively. In contrast, Class C properties increased annual effective rent growth from 3.68% in August 2012 to 4.17% in August 2013.

Read more...August 2013 Apartment Market Summary

GDP growth in Texas areas ranked at the top in 2012 via Real Estate Center at Texas A&M

The resurgent oil and gas industry helped two Texas areas — Midland and Odessa — rank No. 1 and No. 2 in economic growth for U.S. metro areas in 2012, according the U.S. Bureau of Economic Analysis.

Midland posted a 14.4 percent gain in inflation-adjusted gross domestic product from 2001. Odessa saw a 14.1 percent gain in real GDP.

Overall, real GDP rose in 305 of the nation’s 381 metro areas in 2012, fueled mainly by durable-goods manufacturing, trade and financial services. The average U.S. real GDP growth in 2012 was 3.1 percent, up from 1.9 percent in 2011.

Read more...GDP growth in Texas areas ranked at the top in 2012 via Real Estate Center at Texas A&M

Wednesday, September 18, 2013

Which Markets Have Performed Worst Over the Past Five Years? [Video] via Property Management Insider

In Part III of a series on apartment revenue change over the past five years – a time span that includes the recession and the recovery since then – MPF Research reveals which apartment markets have lagged well behind the national norms.

In part one of this special series, MPF Research examined the so-called “Sexy Six” markets favored by many investors and whether or not they lived up to their billing over the past five years. In part two, MPF examined the top 10 performing apartment markets over the past five years.

Watch Video...Which Markets Have Performed Worst Over the Past Five Years? [Video] | Property Management Insider

Houston Economic Update September 2013 via Dallas Fed

Recent changes in the Houston Business-Cycle Index suggest acceleration in economic activity from earlier in the year. The index increased from a revised June growth rate of 1.5 percent to 6 percent in July. Strong activity in the energy industry continues to spur growth in affected areas of the Houston economy. Overall, Houston-area fundamentals remain healthy.

Houston payroll employment grew at an annualized pace of 3.2 percent in July and 1.6 percent over the three months ending in July. Construction and mining and financial activities were the main industries contributing to job growth. Information grew a blistering 30 percent, but it is a small industry. Manufacturing employment, which has been declining since March, contracted 2.4 percent from June to July.

Read more...Houston Economic Update September 2013 via Dallas Fed

APARTMENT MARKET STATISTICS: September 2013 via Multi-Housing News Online

Housing starts in five-plus unit dwellings rose by 25 percent in May 2013 to a seasonally adjusted annual rate of 306,000 units, reports the National Association of Home Builders (NAHB). However, “on a three-month moving average basis, which smooths the month-over-month volatility, housing starts in five-plus unit dwellings were 302,000 in May, basically unchanged from April.”

“This is the fourth consecutive month in which the three-month moving average has registered a level greater than 300,000,” says NAHB.

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

Effective Rent Growth Slowing in Urban Core via

While once Dallas' urban core was hot when it came to annual effective rent growth, as of August 2013, that figure dwindled to below the region's MSA average. According to statistics from locally based Axiometrics Inc., annual effective rent growth in Dallas' Oaklawn submarket was 1%, underperforming the MSA's 3.8% rate, and a definite drop from the 12.3% reported during August of 2011.

Axiometrics' researchers point out that the reason for the precipitous drop is due to a rise in construction due to the high effective rent growth from a couple of years ago. The researchers also state that occupancy has declined in the Oaklawn submarket. In August 2011, occupancy was 95.8%. In August 2013, it stood at 95.3%.

Read more...Effective Rent Growth Slowing in Urban Core - Daily News Article -

Tuesday, September 17, 2013

Houston apartments 2Q 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Builders completed 3,270 multifamily units in second quarter 2013, according to Hendricks-Berkadia. The additions put deliveries at 6,310 units for 2013. The last six months outpaced first half 2012, when 3,520 units were completed.

Developers requested 7,700 multifamily units in first half 2013. The 15,400 annualized unit permits filed in June 2013 was a 5 percent rise from December 2012.

Vacancy dropped 50 basis points to 6 percent in 2Q 2013. The rate was 100 basis points lower than the rate one year prior

Read more...Houston apartments 2Q 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Multifamily development picks up despite falling demand via HousingWire

Over the past few years, renter household formation has outpaced owner household growth, as many young homeowners are being sidelined by unemployment and student debt.

However, recent statistics show that the majority of new renters might not be searching for traditional multifamily housing; instead, they’re renting single-family homes.

According to the latest Housing Insights report from Fannie Mae, single-family rental units represented 51% of the occupied rental stock in 2005 compared to 44.8% for multifamily rental units. Six years later, in 2011, single-family rental units had grown to 54.8% of the occupied rental stock compared to 41.3% for multifamily units.

Read more...Multifamily development picks up despite falling demand | 2013-09-16 | HousingWire

Monday, September 16, 2013

The Fickle Market via Commercial Property Executive

As the economy recovers, investors and lenders alike have been eagerly pouring money back into real estate. The capital markets, however, remain a fickle place. Recent events prove yet again that the field is best served by those who really understand it.

In May, the 10-year Treasury began increasing amid worries about the Federal Reserve’s plan to cut back its bond investment program. Then in June, comments by Fed chairman Ben Bernanke prompted an uptick in interest rates, even though the federal funds rate remained untouched.

None of these increases have been significant in a historical context, but these days even a hint of higher rates stirs panic. Moreover, the broader investment market tends to equate real estate with bonds and higher interest rates with lower yields, as the National Association of Real Estate Investment Trusts recently reported. As a result, REIT stocks have underperformed other indices of late: the FTSE NAREIT U.S. REIT Index posted a total return of 0.83 percent in July, versus 5.09 percent for the S&P 500 and 6.56 percent for the NASDAQ Composite, NAREIT noted.

Read more...The Fickle Market | Commercial Property Executive

Top 10 Apartment Markets Over the Past Five Years [Video] via Property Management Insider

In Part II of a series on apartment revenue change over the past five years – a time span that includes the recession and the recovery since then – MPF Research reveals which apartment markets have been the top performers.

In part one of this special series, MPF Research examined the so-called “Sexy Six” markets favored by many investors and whether or not they lived up to their billing over the past five years.

Editor’s Note: MPF is measuring revenue change based on today’s effective rents for new leases vs. prices charged five years ago as well as looking at the change in occupancy numbers over the same period of time.

Top 10 Apartment Markets Over the Past Five Years [Video] | Property Management Insider

Austin Multifamily via

Population and employment growth are providing a substantial boost to the Austin apartment market. Metro-wide vacancy is hovering in the mid-4 percent range and is 150 basis points below the average historical rate. Rents also increased measurably. In addition to rising job and resident totals, limited new apartment product in recent years supported an average quarterly rent growth of 1.2 percent, compared to three-month gains of roughly 1 percent in the year prior to the recession.

The most notable economic news in the metro is Apple Inc.’s substantial expansion. Over the next eight years, the company will construct and staff a 1 million-square-foot, 39-acre development in Austin’s Far Northwest submarket. Day-to-day operations will yield more than 3,600 new hires, doubling the metro’s number of Apple employees.

Read more... Austin Multifamily via

5 Ways to Increase the Value of an Apartment Project via Blog

Editors Note: Mike Foundos Sr has been doing this a long time. I mean, really long. So, like EF Hutton, when Mike Sr speaks, I shut up and listen. And, since it never hurts to get back to the fundamentals, here are some words of wisdom gained from real, painful experience. Time to flex those CRE muscles.

Five Ways to Decrease Your Cap Rate

1. Decrease your turnover. Turnover is the biggest cost in apt. investments. Lost rent and refurbishing. Rarely talked about but it’s a cash flow leech. Best ways to decrease turnover are tenant satisfaction, tenant’s credit, don’t sign short term leases, minimum one year, don’t raise rent on a tenant who will re-up for another year, save rent increase for new tenants coming in, they don’t know what the last guy paid.

Read | Blog

Friday, September 13, 2013

10-Step Energy Management Action Plan for Property Management Companies via Property Management Insider

It has been calculated that more than $9 billion of energy costs in the multifamily industry could be saved trough energy management. That’s a veritable pot of gold at the end of the proverbial rainbow. And when you consider that the second or third-largest line item for the typical property management company is energy and utility related, it’s a wonder that more property management companies are not actively engaged in some sort of energy management program.

But where do you start? An energy management program can be made up of a few large returns, or many small efforts, that produce very big changes in your energy cost bottom line. To help get you started, here is my 10-step energy management action plan for your property management company. Keep in mind that these steps aren’t just for your apartment communities. Put it to use on your regional and home offices as well.

Read more...10-Step Energy Management Action Plan for Property Management Companies | Property Management Insider

Capital Markets Briefing Q2 2013 via ReisReports

Join Reis Senior Economist, Ryan Severino, as he walks us through his capital markets briefing. In this video, he will review:

The current state of the economy
Our analysis of real estate capital markets
The state of the commercial real estate debt markets
The interplay of the economy, fundamentals, and capital markets
Our outlook for the latter half of 2013

Watch Video...Capital Markets Briefing Q2 2013 | ReisReports

Thursday, September 12, 2013

Raising Rents Without Raising Cain via Multifamily Executive Magazine

Memphis-based Fogelman Management didn’t know what they were getting into during the lease up of one of their 300-unit properties.

The property was under contract for unsolicited offers. And Fogelman was way ahead of schedule, able to lease 40 units to traveling nurses who were paying 1.5 percent higher in monthly rent.

But because the buyer and lender wouldn’t accept revenue from corporate leases, they had to tell the clients that they couldn’t renew their leases. It left them with 40 vacancies all at once.

“I think we got a little bit too greedy getting the lease-up done, and it backfired,” Mark Fogelman, president and COO at Fogelman, said at this year’s MFE conference in Las Vegas.

Read more...Raising Rents Without Raising Cain - Rent Trends, Revenue Management, Budgeting, Conferences, Construction Management, Multifamily, Rents, Software, Upselling And Cross-Selling, Value Engineering - Multifamily Executive Magazine

ALN Monthly Newsletter September 2013 via ALN Apartment Data

ALN Data just released their August 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 September 2013 via ALN Apartment Data

Thinking About Implementing Revenue Management? Five Things You Need to Know Before Starting via

Perfecting the art and science of setting rents appropriately to fill vacant units has long been the Holy Grail for the apartment industry. To that end, many apartment owners and managers have turned to automated revenue management systems, which use sophisticated mathematics to determine real time rents similar to the way the hotel and airline industries set their demand-based pricing. Large national and regional firms were the early adopters of this technology—their bigger footprints suggested scalable benefits—but many of the up-front costs, integration hurdles and cultural shifts that go along with implementing the systems left many smaller firms on the sidelines, waiting to see how the transitions to the new systems would play out.

But as the balance-sheet benefits have become clearer since the early days of revenue management and pressure from the ROI-seeking investment community continues to grow, smaller and mid-sized industry players are now more seriously considering pulling the trigger on automated revenue management systems. While these systems offer many advantages for smaller owners and operators, there are numerous questions that they should be asking beforehand and implications both during and after implementation. So, before making the big purchase, revenue management experts offer up five things that every smaller owner and operator needs to know about revenue management.

Read more...Thinking About Implementing Revenue Management? Five Things You Need to Know Before Starting - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Wednesday, September 11, 2013

Cap Rate Calculations Today via CCIM Institute

Since the market crash five years ago, CCIMs and other commercial real estate professionals have been asked far too often, “What is it worth?” With a paucity of sales from which to extract investment benchmarks, many of us were limited to guesswork, mathematics, or both. To add to our challenges, credit remained tight, forcing a retreat of some lenders from commercial real estate all together.

When financing was not at issue, some of us turned to mathematics to explain the market in a period without empirical transactions. (See “Cap Rate Calculations,” Sept./Oct. 2009 CIRE) But as we head deeper into recovery and lenders return to the market, let’s take a closer look at how lenders might “back of the envelope” or underwrite real estate today by using the Gettel formula to determine capitalization rates. The information may help us close more escrows in our efforts to understand the plight of lenders.

Read more...Cap Rate Calculations Today | CCIM Institute

Tuesday, September 10, 2013

Commercial/Multifamily Delinquency Rates Down in Q2 via DSnews

Commercial and multifamily mortgage delinquency rates fell across all major investor groups in the second quarter, the Mortgage Bankers Association (MBA) reported.

The group’s quarterly analysis examines commercial/multifamily delinquency rates for five of the largest investor groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae, and Freddie Mac. Those groups together hold more than 80 percent of commercial/multifamily mortgage debt outstanding.

Read more...Commercial/Multifamily Delinquency Rates Down in Q2

San Antonio Apartments Keep Chugging, Despite Fewer Job Additions via Property Management Insider

While the local economies in Texas generally are red hot, there’s been a somewhat surprising slowdown of late in San Antonio’s job production numbers. The Bureau of Labor Statistics reports that employment creation during the year-ending July came in at 12,600 jobs, translating to an expansion pace of 1.4%. That’s not an awful result, but the job growth rate had been running at more than 2% throughout 2012, reaching as high as 2.6% a couple of times during the course of the year.

The slowdown in San Antonio’s economic engine didn’t seem to hurt the area’s apartment demand results in a meaningful way, however. Absorption during 2Q came in at roughly 2,800 units, and demand in the year-ending mid-2013 tallied at some 4,200 units.

Read more...San Antonio Apartments Keep Chugging, Despite Fewer Job Additions | Property Management Insider

Monday, September 9, 2013

NREI/Marcus & Millichap Investor Sentiment Keeps Rising in 2013 via National Real Estate Investor

Investor confidence notched steady gains in the first half of 2013. The latest results from an exclusive investor survey conducted jointly by National Real Estate Investor and Marcus & Millichap shows a continued positive outlook for property performance and a strong appetite to increase investment over the next 12 months.

The NREI/Marcus & Millichap Investor Sentiment Index reached a new record high climbing from a mark of 174 in the first quarter of 2013 to 180 in the second quarter—the highest level since the index launched in 2004. The current reading also is nearly double the mark of 91 that was achieved at the low point of the Great Recession in 2009.

Read more...NREI/Marcus & Millichap Investor Sentiment Keeps Rising in 2013 | National Real Estate Investor

The housing market's heyday is long gone via HousingWire

It is part of the American dream to own a home, but according to one commentator, America will never return to the booming housing days that preceded the Great Recession. Per the Real Estate Economy Watch:

Thought leaders ranging from President Obama to Bill Dudley, the president of the Federal Reserve Bank of New York, have pinned the nation’s economic progress on the housing recovery, but the fact is that “we will not be returning to the boom years that preceded the Great Recession. The days when housing was the predominant force driving economic activity are gone, and I view that as a good thing,” said Amir Sufi, professor of finance at the Booth School of Business at the University of Chicago.

Read more...The housing market's heyday is long gone | 2013-09-09 | HousingWire

Multifamily Rental Prices Cresting via NuWire Investor

The Center for Housing Policy reports that rents across the U.S. are rising faster than incomes by about $1.75 for every dollar earned, which means landlords may be reaching the peak of what they can charge for rent before forcing their tenants to look for more affordable housing. Even so, rent growth is not accelerating as much as researchers once predicted, and Reis reports only marginal increases. Those increases, however, have made a significant difference for renters despite the fact that low supply and increased construction in prime markets should be boosting prices even higher. For more on this continue reading the following article from National Real Estate Investor.

The next time your property management software recommends raising the rent on multifamily lease renewals, you might want to think twice.

Read more...Multifamily Rental Prices Cresting

Multifamily Communities | The New American Dream via Multifamily Blogs

While home ownership is well-rooted in American tradition, that may be changing, according to a recent study.

For a majority of people living in the U.S. today, renting is now a practical path to achieving the American Dream, according to a study from MacArthur Foundation and carried out by Hart Research Associates.The study found, as revealed in the foundation’s report How Housing Matters: Americans’ Attitudes Transformed By The Housing Crisis & Changing Lifestyles, some interesting statistics concerning American’s views (based upon telephone interviews of more than 1,400 Americans in addition to focus groups sessions held around the country) on renting vs. home ownership. Here’s the lowdown:

Read more...Multifamily Communities | The New American Dream - Multifamily Blogs

Interest Rates Pressure Multifamily Prices via

Year-to-date, low interest rates and strong operating fundamentals have fueled the multifamily investment market and boosted values, but in recent months, the industry has seen rates begin to rise. Paul Daneshrad, president and CEO of StartPoint Properties, a Beverly Hills-based commercial real estate company with a portfolio worth $800 million in owned and managed properties, sat down with to discuss the current multifamily investing market.

“As interest rates start to creep up, 120 basis points over the last 3 months, this has put some pressure on pricing,” says Daneshrad. Los Angeles is currently performing in alignment with the other two major Southern California submarkets, San Diego and Orange County; however, the most growth is currently coming from Northern California, which is one of the key markets in the nation, showing double-digit growth over the last several years.

Read more...Interest Rates Pressure Multifamily Prices - Daily News Article -

Friday, September 6, 2013

Commercial-Property Values Stall as Interest Rates Rise via WSJ

When interest rates jumped this spring some feared that commercial-property values would slow their rise or possibly even fall.

It seems those fears are being realized.

Green Street Advisors on Friday released its monthly index of commercial property values, which showed that values have been virtually flat for four straight months now through August. The firm tracks values of properties owned by real estate investment trusts, which tends to be weighted toward high-quality real estate in major cities.

Read more...Commercial-Property Values Stall as Interest Rates Rise - Developments - WSJ

Five Energy Management Designations and Certifications Worth Investing In via Property Management Insider

You know that going green and implementing an energy management program are not only the responsible things to do, but let’s be honest: there is some serious green to be made by going green. But becoming environmentally responsible and an energy management pro requires not only effort and some expense to gain those large ROI numbers, it requires expertise.

Do you have an energy manager or consultant on staff or someone willing to fulfill that role? Someone who monitors your energy projects to insure they are saving all the money they should; or review the utility expenses and billing errors for your communities; or finds leaks before their expense runs rampant for months; or find low hanging fruit and free incentives; or understands utility rates, structures, tariffs and tax exemption status?

Read more...Five Energy Management Designations and Certifications Worth Investing In | Property Management Insider

U.S. Metros with Rising Apartment Rent Rates via Multifamily Executive Magazine

According to Trulia's August 2013 Price and Rent Monitors Report, rents have risen 3.5 percent nationally compared to last year. That 3.5 percent represents a 3.9 percent increase in rent of apartment units, compared to only a 1.6 percent rise in rent of single-family homes.

Top 10 Breakdown of Rent Changes in Largest Rental Markets (Y-o-Y%):

Read more...U.S. Metros with Rising Apartment Rent Rates - Business, Housing Data, Rent Trends, Rents, Apartments, Single Family - Multifamily Executive Magazine

Rents Rose 3.5 Percent Nationally, Jumping Higher for Apartments than Single-Family Homes via

Trulia, Inc., a leading online marketplace for home buyers, sellers, renters, and real estate professionals, released the latest findings from the Trulia Price Monitor and the Trulia Rent Monitor. These indices are the earliest leading indicators available of trends in home prices and rents. Based on for-sale homes and rentals listed on Trulia, the monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through August 31, 2013.

Despite Rise in August, Asking Home Price Slowdown Continues
Asking home prices rose 11.0 percent year-over-year (Y-o-Y) and 1.2 percent month-over-month (M-o-M) in August. However, a closer look at the quarterly changes in asking home prices reveals a downward trend that’s much less volatile than the monthly changes suggest. Quarter-over-quarter (Q-o-Q), asking home prices rose 3.1 percent in August, down from 3.2 percent in July and 4.0 percent in April. And this downward slope will likely continue as mortgage rates rise, inventory expands, and investor interest declines.

Read more...Rents Rose 3.5 Percent Nationally, Jumping Higher for Apartments than Single-Family Homes - Multifamily News Headlines – Breaking News, Stories, Top Headlines ::

Thursday, September 5, 2013

5 Years Later, Mortgage Market Still Needs Fannie Mae, Freddie Mac (Update 1) via TheStreet

Five years ago this week, the government bailed out housing finance giants Fannie Mae (FNMA_) and Freddie Mac (FMCC_) and placed them in conservatorship.

It was the first of many bailouts to follow, but it was the largest, with taxpayer support adding up to $188 billion over time.

Today, these government-sponsored enterprises, or GSEs, are back to making record profits, thanks in part to a recovery in housing. By September, Fannie and Freddie will have collectively paid Treasury $146 billion in dividends. Analysts predict the dividends from GSE could make taxpayers whole by the end of 2014.

Read more...5 Years Later, Mortgage Market Still Needs Fannie Mae, Freddie Mac (Update 1) - TheStreet

5 Things Property Managers Must Know About Fair Housing via Appfolio

According to a recent report on fair housing trends, there were nearly 30,000 discrimination complaints filed in the United States in 2012, an increase of nearly 5% from 2011. Here are five things you should know to help avoid being the target of one of those complaints.

1. Be Careful How You Advertise
In your advertising, you can focus on amenities, attributes of your property, and location, but not on the type of tenant you want. Saying “great for young couples” can be considered discriminatory towards older renters, as an example. You shouldn’t use words like “safe” or “exclusive” since that implies that you restrict to whom you rent. Use the fair housing logo or include a statement of non-discrimination at the end of each ad.

Read more...5 Things Property Managers Must Know About Fair Housing

Wednesday, September 4, 2013

From Fannie + Freddie to FHA via Multi-Housing News Online

Multifamily housing has been the fortunate beneficiary of Fannie Mae, Freddie Mac and FHA financing programs. While the two Government Sponsored Agencies are now targeted for elimination, the Federal Housing Administration (FHA) multifamily loan insurance programs, as it turns out, may not necessarily escape existential threats either. It appears the same questions about the role, size and risks of the government agencies can also be applied to the FHA.

In the latest development, the Protecting American Taxpayers and Homeowners (PATH) Act, which has been introduced in the House, proposes to impose affordability requirements on multifamily properties receiving FHA insurance. “FHA is clearly facing legislative challenges,” agrees Claudia Kedda, senior director, Multifamily and Affordable Housing Finance. “Efforts to reform the single-family program have put pressure on HUD to also take steps to mitigate risk on the multifamily side.”

Read more...From Fannie + Freddie to FHA | Multi-Housing News Online

Dallas Beige Book 9/4/13 via Dallas Fed

The Eleventh District economy expanded at a moderate pace over the past six weeks. While many respondents noted steady demand, there were more noting improving versus declining demand. Sales grew for firms in residential construction, retail, accounting, fabricated metals, food and kindred products, and automobile dealerships. Financial firms and paper producers reported a decline in demand. The energy sector noted some flattening of activity at high levels. Drought continued to plague the region although recent rains have slightly improved growing conditions in some areas.

Most responding firms said that prices were stable since the last report. Contacts in oil, paper and beef production reported slight increases in prices while law firms and retailers noted slight price reductions. Fabricated metals producers and accounting firms said that increasing cost pressures may result in price increases in the coming months. Contacts in the residential housing sector noted that overall home prices in most major metros continued to rise at a moderate to fast pace.

Read more...Dallas Beige Book - Dallas Fed

Texas Economic Indicators September 2013 via Dallas Federal Reserve

The Texas economy continues to expand, with employment growing at a 2.3 percent annual rate in July. Texas existing-home sales, single-family construction permits and housing starts all increased in July. Texas exports edged up in the second quarter of 2013. Manufacturing activity increased but at a slower pace in August, according to the Texas Manufacturing Outlook Survey.

Texas gained 21,400 jobs in July after adding 12,600 jobs in June. Current Texas employment stands at 11.17 million, according to the payroll survey (CES).

The Texas unemployment rate held steady at 6.5 percent in July. The Texas rate remains lower than the U.S. rate, which was 7.4 percent in July.

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

Multifamily delinquency-rate decline implies strong market via HousingWire

Multifamily mortgage delinquency rates dropped in the second quarter of 2013, according to a report from the Mortgage Bankers Association, further indication that the multifamily market is picking up alongside the recovery in housing. Commercial loans overall saw a decline as well.

"The quarterly decline in the delinquency rate of loans held in commercial mortgage-backed securities was the largest on record, and delinquency rates for loans held by life companies and the GSEs remain low and fell lower during the quarter," said Jamie Woodwell, vice president of commercial real estate research at MBA.

The analysis from the MBA studies commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac. These groups hold more than 80% of commercial/multifamily mortgage debt outstanding when combined.

Read more...Multifamily delinquency-rate decline implies strong market | 2013-09-04 | HousingWire

US CMBS Delinquency Rate Continues to Contract to Lowest Level in Three Years via Trepp

Trepp, LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets, released its August 2013 U.S. CMBS Delinquency Report today (available at

The delinquency rate for US commercial real estate loans in CMBS dropped for the third straight month to 8.38%. This represents a 10-basis-point drop since July’s reading and a 175-basis-point improvement from a year ago. The August 2013 level is the lowest Trepp delinquency rate in three years.

Read more...Trepp US CMBS Delinquency Rate Continues to Contract to Lowest Level in Three Years - Press Release

Tuesday, September 3, 2013

Confidence in Multifamily at All-Time High via Realtor Magazine

The apartment and condominium market continued to gain momentum in the second quarter with builders’ and developers’ confidence in the sector soaring to an all-time high, according to the National Association of Home Builders’ multifamily index. The index rose to its highest reading since 2003, which is the year the index began.

The index measures builder and developer sentiment in the apartment and condo market. The latest reading for the second quarter was 61. Any number above 50 indicates that more respondents report conditions are improving than getting worse.

Read more...Confidence in Multifamily at All-Time High

Affordable Housing Community for Veterans Opens via Commercial Property Executive

Public officials and non-profit groups marked a milestone in the effort to end homelessness among Houston-area veterans with the recent opening of Travis Street Plaza, a $19 million permanent housing community for very low-income, homeless, and disabled veterans. Cloudbreak Houston, an affiliate of Cantwell-Anderson Inc., developed the project.

Located at 4500 Travis St., Travis Street Plaza comprises 188 efficiency and 4 one- bedroom units primarily for individuals earning at or below 60 percent of area median income. Some units are reserved for residents earning at or below 30 percent of AMI. Community amenities include perimeter fencing, controlled access, laundry rooms, covered pavilion with barbecue grills and tables, fitness center, community room and 87 covered parking spaces.

Read more...Affordable Housing Community for Veterans Opens | Commercial Property Executive

Are we Overbuilding Multifamily? via Multifamily Blogs

A gradual shift in the American Dream from homeownership to renting has some U.S. developers of multifamily housing and real estate market analysts (like the CoStar Group) worried over a threat of overbuilding. The concern is that the rapid increase in rental demand will eventually (and soon) dwindle, leaving a plentitude of “sitting empty” apartments and apartment buildings.

Others though — like the market researchers who attended the annual National Multi Housing Council meeting earlier this year — contend that as a whole, the industry remains safe from being over saturated with building.

“While the pipeline in some markets is at worryingly high levels (see Which Markets are at Most Risk of OverDevelopment? below), the national supply is within normal levels,” said Bendix Anderson of National Real Estate Investor.

Mark Obrinsky of the National Multifamily Housing Council (NMHC), also doesn’t believe we are overbuilding multifamily. “The rebound in the single-family home market doesn’t mean that the multifamily market is overbuilt, Obrinsky said.

Read more...Are we Overbuilding Multifamily? - Multifamily Blogs