Wednesday, January 29, 2014

DFW Economic Indicators January 2014 via Dallas Fed

The Dallas–Fort Worth economy continued to expand in December, although employment took a slight dip. For all of 2013, DFW employment grew a moderate 2.3 percent, roughly in line with the state’s rate of 2.4 percent and well above the U.S. pace of 1.6 percent. Residential activity remains healthy, with tight home inventories and strong growth in apartment construction. The Dallas and Fort Worth unemployment rates remain below those of the U.S and Texas, and the Dallas Fed business-cycle indexes suggest continued expansion in the DFW metroplex.

While DFW employment edged down in December, monthly numbers are subject to revision. The metro area lost jobs at an annual rate of 1.4 percent in December; however, jobs grew at a 0.6 percent pace in the fourth quarter. For the year, DFW added 70,600 jobs. Currently, area employment stands at 3.14 million, according to the Bureau of Labor Statistics’ payroll survey.

Read more...DFW Economic Indicators January 2014 via Dallas Fed

Austin jobless rate drops to lowest point in five years via Real Estate Center at Texas A&M

In 2013 Austin had its worst year for job creation since the recession — but it would still be a stretch to describe the local labor market as anything other than robust. Employers in the metro area added 23,700 jobs during 2013, an increase of 2.8 percent, according to Texas Workforce Commission.

It was the first time Austin’s annual job-creation rate dipped under 3 percent since 2009. The local jobless rate dropped to 4.5 percent in December, down from 4.7 percent the month before.

Read more...Austin jobless rate drops to lowest point in five years via Real Estate Center at Texas A&M

Tuesday, January 28, 2014

Increasing Urban Core Completions Probably Won’t Derail Houston’s Apartment Sector via Property Management Insider

Houston’s apartment market is logging one of the country’s most impressive performance stories. While current occupancy of 93.9% still moderately lags behind the U.S. norm, that rate is 150 basis points or so above the area’s 20-year average. Annual rent growth for new leases registers at 4.4%, a top 10 performance among the nation’s biggest apartment markets.

Positioning Houston favorably during the immediate future, and perhaps a surprise to some, the metro actually doesn’t rank as an especially aggressive apartment construction center for the moment.

Read more...Increasing Urban Core Completions Probably Won’t Derail Houston’s Apartment Sector | Property Management Insider

Texas Manufacturing Outlook Survey via Dallas Fed

This month’s survey data include annual seasonal factor revisions. In January of each year, the Federal Reserve Bank of Dallas revises the historical data for the Texas Manufacturing Outlook Survey after calculating new seasonal adjustment factors. Annual seasonal revisions result in slight changes in the seasonally adjusted series. Read more information on seasonal adjustment.

Texas factory activity increased for the ninth month in a row in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged up from 6 to 7.1, indicating output grew at a slightly stronger pace than in December.

Other measures of current manufacturing activity also reflected a pickup in growth.

Read more...Texas Manufacturing Outlook Survey - Dallas Fed

Quick Facts: Investment Returns on Apartments via National Multi Housing Council

NMHC routinely fields the question about why apartments are a good investment and how apartment are expected to perform in the future. This section is an overview of the apartment sector as an investment option.

The returns on investments in apartments may exceed or fall short of those of the past. But demographic trends suggest that demand for apartment living should continue to grow moderately. Furthermore, compared to other property types, apartments have shorter average development periods, which makes it easier for supply to adjust relatively quickly to changing demand, which in turn reduces the amplitude of building cycles. Finally, rent control and other forms of regulation of rental housing are less extensive in the United Statesthan in many other countries.

Read more...Quick Facts: Investment Returns on Apartments - - NMHC - National Multi Housing Council

MARKET SNAPSHOT: Demand in Houston Remains Strong as Economy Prospers via Multi-Housing News Online

Strongly supported by a thriving energy sector as well as a robust multifamily industry, Houston’s economy is expected to experience further growth throughout 2014. Employment gains are projected to come from a wide array of industries, including manufacturing and professional services as well as corporate expansions, which will yield 111.700 jobs in 2014 and a 3.9 percent jump in payrolls, according to research data from Marcus & Millichap.

Investor interest in the Houston apartment market remains strong, with all property size tranches having recorded an increase in deals during the past year. While the number of properties sold with more than 100 units increased more than 40 percent, transactions involving assets with fewer than 50 apartments doubled from one year earlier.

Read more...MARKET SNAPSHOT: Demand in Houston Remains Strong as Economy Prospers | Multi-Housing News Online

JLL Report Spotlights 14 Multifamily Markets Where Oversupply Not an Option via

Too many apartments, not enough renters? Will an oversupply of development saturate newly recovering markets? How much is too much? Those are the questions that still hit home for multifamily investors in 2014. But are the worries legitimate? For some markets, perhaps. But Jones Lang LaSalle predicts 14 cities will overcome oversupply issues, with Sunbelt markets such as Tampa, Jacksonville and Phoenix shining brightly in the year ahead.

The markets JLL expects to shine into 2017 include: Phoenix, Atlanta, Jacksonville, Tampa, San Diego, Dallas-Fort Worth, San Antonio, Houston, Philadelphia, Orange County, the Inland Empire, Palm Beach, Las Vegas and Memphis.

Read more...JLL Report Spotlights 14 Multifamily Markets Where Oversupply Not an Option - Daily News Article -

Monday, January 27, 2014

The Renter Lifecycle via Axiometrics

Housing demand and preferences used to follow a fairly linear progression. A young person setting out on his/her own would rent for a period of time, would marry, and then buy a house. More often than not, the married couple would remain in the house until death (or until illness forced a move into a nursing home).

According to the Joint Center for Housing Studies of Harvard University (JCHS)’s “America’s Rental Housing: Evolving Markets and Needs,” the demand for housing isn’t quite so linear these days. Certainly, young adults are the most likely age group to rent; especially those young adults who are leaving home for the first time. And certainly, as people become more settled, the share that rents tends to decline until later in life.

But the JCHS offered some surprising statistics such as:

• Nearly two-thirds of 25-29-year-olds and more than half of households in their early 30s rent their homes.

Read more...The Renter Lifecycle

Friday, January 24, 2014

San Antonio Economic Update January 2014 via Dallas Fed

Economic growth in the San Antonio metropolitan area slowed in 2013, partly due to weakness in federal government spending. The unemployment rate declined from 6.1 percent in December 2012 to 5.9 percent in November 2013. Job growth slowed to 1.2 percent in 2013 from 2.6 percent in 2012. In November, the most recent month of data, job growth picked up partly due to a rebound in federal government jobs, which rose to their highest levels since June. The housing market remained strong in 2013, and this strength will likely carry forward into this year.

Despite a generally sluggish economy in 2013, San Antonio went into the fourth quarter with two consecutive months of strong job growth, suggesting increasing momentum at the start of 2014. Unemployment was 5.9 percent for four consecutive months beginning in August, reflecting weak but steady household job and labor force growth. Retail sales and wages in the second quarter of last year increased faster than the national average,

Read more...San Antonio Economic Update January 2014 via Dallas Fed

Shedding Light on Low-Income Housing via Axiometrics

In a previous article, we discussed categories of multifamily renters different from the affluent millennials consistently highlighted as the typical apartment-dweller. In this article we’ll highlight another renter group; low- to moderate-income wage-earners. Unlike the millennials, the lower- and middle-income wage-earners are sliding into a housing crisis. Demand among this income group is growing, while supply is disappearing.

In its recent report, “America’s Rental Housing: Evolving Markets and Needs,” the Joint Center for Housing Studies of Harvard University (JCHS) points out that this isn’t a “poor people” problem. Though cost-burdened renters do tend to have lower incomes, a large portion of this group actually consists of moderate-income renters.

Specifically, between 2001-2011, the largest increase of cost-burdened renters was found among those with incomes between $30,000-$44,999 (an 11% increase) and those with incomes between $45,000-$74,999 (a 9% increase).

Read more...Shedding Light on Low-Income Housing

Despite Optimism, Employment Trends Remain Disconcertingly Weak via

Optimism is trending in real estate circles. On the conference circuit, there’s talk of rising prices, easier access to financing, and higher rents. Lending standards are easing. Lending volume is growing faster than borrower quality is improving. We've moved from recovery to expansion.

What’s behind the bullish assessments and tilt in risk-taking? Artificially low interest rates and investor and lender competition have certainly aided in recouping lost property value; that process is largely complete for top tier assets in prime metros. In the arena of property fundamentals, however, it’s not a demand-driven recovery. The tally of occupied office and industrial space is slowly returning to its pre-crisis peak, so our buildings are no doubt feeling more full. But that doesn’t reflect momentum in job growth as much as a slow recovery of lost jobs and an absence of significant new construction. While sentiment and perceptions are shifting, the job market remains a weakest link in the recovery, constraining the medium-term outlook.

Read more...Despite Optimism, Employment Trends Remain Disconcertingly Weak - Chief Economist Article -

NMHC Dispatch: Despite Pressures, Multifamily Still A Hot Commodity via

In terms of multifamily investment activity and trends, this is the most interesting market most industry players have seen in quite some time. So said Daryl Carter, chairman and CEO of Avanath Capital Management, at the NMHC Apartment Strategies Conference, held here immediately preceding the organization’s annual meeting this week.

Carter was the moderator of “The View from Investors,” where decision makers from some of the biggest multifamily investment firms shared their views on the market. Speakers included Kees Bruggen, managing director of Stonebridge Investments; Terri Herubin, portfolio manager for Cornerstone Real Estate Advisers LLC; Michael Katz, co-CEO of Sterling American Property Inc.; and Ella Shaw Neyland, president of Steadfast Income REIT.

Read more...NMHC Dispatch: Despite Pressures, Multifamily Still A Hot Commodity - Daily News Article -

Thursday, January 23, 2014

Apartment Market Statistics: January 2014 via Multi-Housing News Online

Investment returns on multifamily fell from 2.50 to 2.48 in the third quarter of 2013, according to the National Council of Real Estate Fiduciaries (NCREIF).

Returns from commercial real estate as a whole, however, increased to 2.57 percent.

Multifamily loan originations index fell 20 percent from 224 to 187 in the third quarter, according to Mortgage Bankers Association (MBA). The index is still higher than the 182 index in the third quarter 2012.

Read more...APARTMENT MARKET STATISTICS: January 2014 | Multi-Housing News Online

San Antonio Apartment Market Update December 2013 via

Market Summary

Most key metrics of the San Antonio area multifamily sector recorded positive changes in December 2013.

The occupancy figures recorded mostly negative values for all the classes. For class A properties, occupancy decreased by 0.58% over the month to close at 92.94%; and decreased by 1.12% over the year.

Read more...San Antonio Apartment Market Update December 2013

Austin Apartment Market Update December 2013 via

Market Summary

All metrics for the Austin area multifamily sector recorded both positive and negative changes in December 2013.

Occupancy figures recorded both positive and negative figures for the classes for the month. Class A properties reported a decrease of 0.26% over last month, and 0.07% over last year. The largest increase over the month was recorded for Class D reporting an increase of 0.78%. The largest increase over the year was noted for Class B with an increase of 0.28%.

Read more...Austin Apartment Market Update December 2013

Houston Apartment Market Update December 2013 via

Market Summary

Key metrics for the Houston area multifamily sector recorded both positive and negative changes in December 2013.

Occupancy figures for the classes recorded both positive and negative changes over the month. Class A recorded a decrease of 0.26% to close at 94.01%. The largest monthly increase was noted for Class D properties (0.13%). For Class A properties the average went down by 0.38% over the year. The largest annual increase was noted for Class C properties with an average increase of 2.54% to close at 89.01%.

Read more...Houston Apartment Market Update December 2013

Wednesday, January 22, 2014

Dallas/Ft. Worth Apartment Market Update December 2013 via

Market Summary

The key metrics for the Dallas/Fort Worth area multifamily sector recorded significant changes both over the month and over the year.

Over the month all the classes recorded mostly a downward trend in terms of occupancy. Class A properties recorded a decrease of 0.38% over previous month. Also on a year-over-year basis Class A properties recorded a decrease of 0.54%. Class D recorded the largest increase of 0.05% over the month. The largest annual increase of 1.46% was also noted for Class C properties.

Read more...Dallas/Ft. Worth Apartment Market Update December 2013

ALN Monthly Newsletter January 2014 via ALN Apartment Data

ALN Data just released their December 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 January 2014 via ALN Apartment Data

NMHC Dispatch: Underdog Markets Shine in Multifamily via

Think of some of the best-performing markets for multifamily today that aren’t New York City or in Southern California. Now think of a few of the surprise markets you didn’t think would be on that list as recently as five years ago.

Chances are, Houston, Dallas and Seattle are probably on your lists. These markets, according to Greg Willet, VP of MPF Research, “have not turned out to be the type of markets many people thought they would be.” Willet moderated the session, titled “Changing Markets and Market Influences,” at the 2014 NMHC Apartment Strategies Outlook Conference, held here yesterday.

Read more...NMHC Dispatch: Underdog Markets Shine in Multifamily - Daily News Article -

Tuesday, January 21, 2014

Axiometrics Reports Apartment Market Ends 2013 With Slowing But Still Solid Rent Growth via Axiometrics

Axiometrics Inc., the leading provider of apartment data and research, reported today that annual effective rent growth maintained its two-year moderation trend in December, with rent growth measuring 2.74%. National occupancy declined slightly to 94.2%. While lower than in recent months, these rates are still above their long-term historical averages, which are 2.15% and 94.0%, respectively.

For 2014, Axiometrics forecasts effective rent growth at the national level to reach 2.70%. Occupancy is expected to remain near the current 94.2% early in 2014, but will likely decelerate late in the year as new supply continues to increase.

“Despite the slowing national trend, many market areas continue to generate rent growth above 3.5%,” said Ron Johnsey, president of Axiometrics. “The apartment market is still strong by historical standards and we expect that trend to continue in 2014 as effective rent growth remains steady, rather than spectacular. In the second half of the year there is some concern about how ever increasing supply will impact the market.”

Read more...Axiometrics Reports Apartment Market Ends 2013 With Slowing But Still Solid Rent Growth

Troubles Ahead for Commercial Real Estate Loan Refinancing via Commercial Observer

With an estimated $1.4 trillion in commercial mortgages due to mature between 2014 and 2017, lenders and investors may be in for a flood of refinancing that could present new challenges for the market, according to a December 2013 year-end Trepp report.

Northeast states, including New York, New Jersey and Connecticut, contain the greatest volume of loans due to mature between 2014 and 2017 at a total near $100 billion. The Northeast region represents 30 percent of all maturing loans, followed by the Pacific and Southeast regions, each with close to 20 percent. The Midwest, Southwest and Mountain regions each represent less than 15 percent of maturing loans, according to the Trepp report.

CMBS loans make up one fourth of the total, with $346 billion in CMBS loans due to mature before 2018.

Read more...Troubles Ahead for Commercial Real Estate Loan Refinancing | Commercial Observer

Multifamily Trends | How are today’s renters searching for their next apartment? via Multifamily Blogs

The hardest part about securing renters these days is just getting their attention. In the old days, multi-family complex users would do it with giant headlines and graphics in newspaper ads. Now even the newspapers are gone for the most part or they have moved online.

Actually, the situation is better than ever for both renters and owners. Online search means renters only have to look at relevant matches instead of scanning a giant sheet of paper and circling possible choices. For owners, ads and marketing content can be placed in front of a specific audience, such as young urban professionals instead of broadcast to the whole world.

We've gathered the latest stats and survey results on how today’s renters are looking for apartments and the tools they are using.

Read more...Multifamily Trends | How are today’s renters searching for their next apartment? - Multifamily Blogs

Monday, January 20, 2014

It's a landlord's world now via HousingWire

Another report – this time the Securitization Weekly Overview from Bank of America-Merrill Lynch (BAC) – is forecasting a shift away from single-family home purchases to a rental market.

Granted, this is not the first time a report predicting multifamily growth has hit in the past few months, but it does reiterate a common theme – investors are betting on multifamily more and more often.

Just last week, HousingWire reported that more younger Americans are expected to pile into the multifamily market after spending years in their parents houses or sharing apartments with roommates.

Read more...It's a landlord's world now | 2014-01-20 | HousingWire

Threat Alert? Homeownership Rate Inches Up via Multifamily Executive Magazine

It’s been a great few years for the multifamily market.

Demand has steadily increased for rental housing and, even though rent growth peaked in 2012, owners are still experiencing consistent, sometimes historic, growth in a number of markets. But as that rent growth marches on, and the for-sale market continues to revive, it's forcing many renters to reconsider the rent. vs. own debate.

“Now that the housing market is recovering, a lot of people are changing their minds on renting versus owning,” says Ryan Severino, senior economist and associate director of research at New York–based Reis. “I think it’s the landlords, with top-of-the-market rents, that are probably going to face the most competition as more and more of their renters sort of reconsider the rent versus own decision.”

Read more...Threat Alert? Homeownership Rate Inches Up - Multifamily Executive Magazine

Young Americans on homeownership strike? via REwired

They used to say never trust anyone over 30. Those words obviously rang true 20 years ago when the average 30-year-old typically managed to obtain a modicum of stability in their life in the form of a stable job and a mortgage.

But as ZeroHedge points out in this article, the old image of young adulthood is dying a slow death. And single-family home sale opportunities are going with it in some cases, although not for a lack of desire.

The Zero Hedge report describes America’s under-30 crowd as struggling with student debt, remaining unmarried and unemployed or underemployed. They also have a very strange relationship with housing — at times living at-home with relatives, partnering up with roommates or remaining renters for long periods of time.

Read more...Young Americans on homeownership strike? | REwired

The Changing Face of Renters via Axiometrics

When it comes to apartments, the general understanding is that millennials, specifically, young, single adults, are the most likely cohort for such product. But in a recent report, researchers with the Joint Center for Housing Studies of Harvard University (JCHS) have shed more clarity on the future renters.

In its “America’s Rental Housing: Evolving Markets and Needs,” the JCHS noted that, “over the next decade, two broad demographic trends – the aging of the population and the increasing importance of minorities for household growth – will drive significant changes in rental demand.” In other words, while millennials make up the bulk of today’s rental growth, older baby boomers and minority groups – specifically Hispanics – will also have a huge impact on demand for rental housing in the future.

Read more...The Changing Face of Renters

2014 Multifamily Investment Forecast via Multi-Housing News Online

What’s in store for multifamily investors in the new year ahead? Most industry observers are expecting financing volumes to further expand in 2014. “We do think there will be more capital available,” says Bob Barolak, co-COO at Greystone. Lenders will become even more eager to make loans in the multifamily space, he says, because of greater confidence in the economy and markets.

Another major reason for an expected bump in capital available in the next 12 months is that CMBS financing has come back into the multifamily sector—from a volume of practically zero in 2012. “Until the second quarter of 2013, CMBS lenders could not compete in the multifamily space,” Barolak points out. “That has changed in a big way. They will continue to increase market share significantly in 2014.”

Read more...2014 Multifamily Investment Forecast | Multi-Housing News Online

Friday, January 17, 2014

Marcus & Millichap 2014 Outlook: Refinance Now, Look to Value-Add via Multi-Housing News Online

Long term fundamentals for the apartment industry are looking strong according to Marcus & Millichap’s 2014 Apartment Market Outlook. Continued job growth and already record-high occupancies should keep the multifamily sector strong for several years. The presentation did, however, warm of the possibility for softness in certain core urban markets due to overbuilding.

Overall macro economic trends paint a positive picture for apartments. Retail sales are 15 percent above where they were in the depths of the recession. We have regained 7.4 million out of the 8.7 million jobs lost during the downturn. This job growth is broad based, with meaningful hiring occurring in all the critical sectors. Another positive indicator is coming from a strengthening single-family market, says Hessam Nadji, senior vice president, managing director and chief sustainability officer at Marcus & Millichap.

Read more...Marcus & Millichap 2014 Outlook: Refinance Now, Look to Value-Add | Multi-Housing News Online

A New Take on an Old Tale (of Two Cities) via Axiometrics

By now, just about everyone is familiar with the so-called “Texas miracle.” Thanks to consistent job creation and in-migration, Texas ends up on many top-10 lists for job and population growth.

Many times, it’s instructive – and interesting – to delve further into what’s going on in booming states by focusing on certain MSAs. Specifically, two interesting cities to compare and contrast when it comes to growth (both population and multifamily) are Austin and its neighbor to the south, San Antonio.

Linked by Interstate 35, these two cities are less than 80 miles apart; if traffic is flowing well, it takes a little more than an hour to get from the CBD of Austin to San Antonio’s downtown area. Austin is known as the seat of Texas’ government and home to the University of Texas. San Antonio boasts its Riverwalk and the Alamo, an important piece of Texas history.

Read more...A New Take on an Old Tale (of Two Cities)

Apartment Markets Soften Slightly According to NMHC Survey via National Multi Housing Council

Apartment market conditions weakened a bit in January compared with three months earlier. The market tightness (41), sales volume (41) and debt financing (42) indexes were all a little below the breakeven level of 50, although the equity financing index rebounded to 50. Higher interest rates may largely explain the modest decline in both sales volume and debt financing. With considerable equity capital continuing to look for apartment opportunities, a number of respondents noted a growing divide between would-be buyers and sellers on pricing.

“Apartment markets are little changed from October,” said Mark Obrinsky, NMHC’s Senior Vice President for Research and Chief Economist. “At least half of our respondents to each of our four main questions reported conditions as unchanged from three months earlier. Although markets are a little looser than in October, this is largely seasonal; overall markets remain fairly tight.

Read more...Apartment Markets Soften Slightly According to NMHC Survey - - NMHC - National Multi Housing Council

Leasing Season Preview: 2014 is a Battlefield via Multifamily Executive Magazine

Terry Danner knows this leasing season is going to be a fight. But Danner, CEO of Riverstone Residential Group, is prepared to win.

Danner hopes his properties will stand out from the competition in this upcoming leasing season, and to help that effort, the company will be armed with some very recent data. Riverstone surveys many of its site-level employees to get their opinions on trends and challenges in the industry, which helps to shape the Dallas-based company's strategy.

One key finding: About 55 percent of the 569 site-level employees responding to the Riverstone survey say prospective renters are visiting between three and four properties before actually signing a lease.

Read more...Leasing Season Preview: 2014 is a Battlefield - Multifamily Executive Magazine

Wednesday, January 15, 2014

Dallas Beige Book 1/15/2014 via Dallas Fed

The Eleventh District economy expanded at a moderate pace over the past six weeks. Manufacturing activity continued to increase overall and outlooks were quite positive, although there were a few reports of weaker demand. Retail and automobile sales reports were mixed, and nonfinancial services firms generally reported improved demand. Sales of single-family homes improved slightly, and apartment, office and industrial leasing activity held steady. Loan demand edged up at financial institutions. Prices increased mildly at several responding firms, and employment held steady or rose modestly. There was a pickup in reports of pay increases and wage pressures. Industry outlooks were positive, and several were more optimistic than during the prior reporting period.

Read more...Dallas Beige Book - Dallas Fed

Houston Economic Update January 2014 via Dallas Fed

The Houston Business-Cycle Index accelerated to a 5.1 percent growth rate in November, up from a revised 3.4 percent rate in October. Oil and gas industry fundamentals look healthy, although industry employment declined. Refining and plastics continue to perform well, and overall labor market conditions improved. Houston seems to have bounced back strongly from late summer softness for what’s shaping up to be a strong fourth quarter.

Houston payroll employment grew at an annual rate of 3 percent from October to November. Gains were particularly strong in the broad trade, transportation and utilities industries. Declines were again concentrated in financial activities, but construction and mining also fell. During the three months ending in November, employment grew at an annualized rate of 4.1 percent.

Read more...Houston Economic Update January 2014 via Dallas Fed

San Antonio apartment 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Slowing apartment demand coincided with the deceleration in hiring last year as 2,820 apartments were absorbed compared to 3,600 newly occupied units in 2012, according to Hendricks-Berkadia.

Builders delivered 4,960 apartments in 2013, the largest number of completions since 6,960 units were built in 2006. Approximately 40 percent of the deliveries were in northern San Antonio.

Read more...San Antonio apartment 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Tuesday, January 14, 2014

MF Starts Post Double-Digit Gains via

There was “a mix of good and fair news” in the most recent residential permitting report from the US Census Bureau, Axiometrics said Tuesday. The fair news: building permits for November 2013 were down slightly. The good news: permitting remains at its highest level since 2008, and the development picture looks especially bright when it comes to housing starts.

Permits for November measured on a seasonally adjusted annual rate stood at 1,007,000 privately owned housing units, off 3.1% from October’s 1,039,000, the Dallas-based research firm reported. However, the November figure was up 7.9% year-over-year from 933,000 in November 2012. Annual multifamily permitting has averaged 321,000 over the past year.

Read more...MF Starts Post Double-Digit Gains - Daily News Article -

Austin apartment 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Rental demand surged last year with the net absorption of 6,240 apartments, up from 3,350 units absorbed in 2012. The Highway 183/Cedar Park/Leander submarket led leasing activity with 900 apartments absorbed, up from 60 units in the preceding year, according to Hendricks-Berkadia.

Construction completed on 6,690 units during the last 12 months, up 142 percent from deliveries in the prior year. The bulk of new inventory was in the Highway 183/Cedar Park/Leander and Far South submarkets with 1,690 units and 1,310 units, respectively.

Read more...Austin apartment 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Corpus Christi apartment forecast 2014: Hendricks-Berkadia via Real Estate Center at Texas A&M

In 2014, 440 units are forecast to be absorbed, up from the 120 units absorbed in 2013. Leasing activity should increase again in 2014 with the absorption of 520 units.

Deliveries are skyrocketing as 980 apartments are scheduled to come online during the next 12 months, a four-fold surge in deliveries from 2013. Deliveries will ease in 2015 as 450 units are completed.

Multifamily permit submissions are expected to increase 60.3 percent with 590 units over the upcoming four quarters. Following two years of increased permitting activity, developers should pull back requests to 270 units in 2015.

Read more...Corpus Christi apartment forecast 2014: Hendricks-Berkadia via Real Estate Center at Texas A&M

Monday, January 13, 2014

Dallas/Fort Worth Leads U.S. in Both Supply and Demand for 2013 [Video] via Property Management Insider

The return of the apartment construction boom in Dallas/Fort Worth has corresponded to a sustained boom in demand for apartments – allowing occupancy rates to hold at a 14-year high and triggering another round of very solid rent growth.

Economy: Apartment demand in Dallas/Fort Worth was stronger than anywhere else in country in 2012 and then again in 2013. The high demand reflects back to back years of strong job growth.

Read more...Dallas/Fort Worth Leads U.S. in Both Supply and Demand for 2013 [Video] | Property Management Insider

Monthly Review of Texas Economy, December 2013 via Real Estate Center at Texas A&M

The Texas economy gained 275,700 nonagricultural jobs from November 2012 to November 2013, an annual growth rate of 2.5 percent compared with 1.7 percent for the United States (Table 1 and Figure 1). The state’s nongovernment sector added 261,700 jobs, an annual growth rate of 2.8 percent compared with 2.1 percent for the nation’s private sector (Table 1).

Texas’ seasonally adjusted unemployment rate fell to 6.1 percent in November 2013 from 6.3 percent in November 2012. The nation’s rate decreased from 7.8 to 7 percent (Table 1).

Table 2 shows Texas industries ranked by employment growth rate from November 2012 to November 2013. All Texas industries had more jobs in November 2013 than in November 2012. The state’s professional and business services industry ranked first in job creation followed by the mining and logging industry, trade industry, information industry, and leisure and hospitality industry.

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

Don’t Cut Apartment Rents Too Soon via National Real Estate Investor

Apartment managers should not rush to cut rents, even if a flood of new apartments are expected and the construction cranes loom over their properties. If vacancies are still low, there still may be time to raise rents before competition for tenants force existing apartments to trim their rental rates.

“You can take the haircut in rents too soon,” says Greg Willett, vice president for MPF Research.

As the national economy strengthens, demand for apartments is improving overall, even though property managers worry about the rising tide of new apartments. So far, demand and supply are roughly in balance, according to recent reports from MPF, Reis, and Marcus and Millichap. But the strongest markets for rent growth in 2013 and 2014 have been and will be secondary markets overlooked for now by the increase in new construction.

Read more...Don’t Cut Apartment Rents Too Soon | Multifamily content from National Real Estate Investor

3 things to know about interest rates in 2014 via HousingWire

Interest rates will go up. Or they will stay the same. One of those two things will definitely happen in 2014, economists say, and some lenders and investors may have trouble adjusting to the change.

"We think rates are generally headed up. We have a growing economy both here and aboard,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association (MBA). "We’re going to get some differing data like today’s jobs report which was off, but the next jobs report may see employment up. We are anticipating the job market is going to grow in 2014 and the recovery will continue."

Further, he said, a longer-term factor will be that a growing federal deficit will put upward pressure on rates. And third, the Federal Reserve has already made it clear that if U-3 unemployment goes below 6.5%, it will let rates rise.

Read more...3 things to know about interest rates in 2014 | 2014-01-10 | HousingWire

Friday, January 10, 2014

Milken: Austin named US's top large city via Austin Business Journal

Austin has been named the nation's best-performing large city in 2013 in terms of job growth and sustainability by the Milken Institute.

The comprehensive economic report analyzed new jobs, wage and salary growth as well as technology industry growth including high-tech gross domestic product growth and concentration. After all of the numbers were crunched, the Austin-Round Rock-San Marcos came out on top.

Read more...Milken: Austin named US's top large city - Austin Business Journal

DFW apartments 2013: Hendricks-Berkadia via Real Estate Center at Texas A&M

Healthy employment gains supported apartment demand as absorption rose 25 percent since the end of 2012. Renters occupied 13,500 additional apartments in 2013 compared to 10,750 units during the year before.

The number of completions surged in 2013 as 12,300 apartments were delivered compared to 7,340 units in 2012. Even with this increase in activity, deliveries trailed absorption for the fourth consecutive year.

Permitting activity tapered off in 2013, suggesting a temporary pull back by developers to mitigate potential inventory excesses. Builders requested permits for 15,030 apartments in 2013. In the preceding year, 17,260 units were approved.

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

Thursday, January 9, 2014

Booming Austin sees costs of living skyrocket via Real Estate Center at Texas A&M

Austin is on a winning streak, amid twin booms in economic and population growth. Along with the city's success has been an increase in its cost of living.

The population grew from an estimated 674,000 in 2003 to 830,000 last year. Some area like Round Rock grew even faster, making Austin among America's fastest-growing large metro areas.

In August, Forbes magazine ranked the Austin area second among cities nationwide for job growth.

Read more...Booming Austin sees costs of living skyrocket via Real Estate Center at Texas A&M

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

Leasing activity climbed with the net absorption of 14,740 units during the previous 12 months, up from 14,470 units absorbed in 2012, according to Hendricks-Berkadia.

Builders completed 9,010 apartments last year, up 101.5 percent from 2012. Developers were particularly active in the Montrose/River Oaks submarket where inventory jumped with 3,790 new units during the prior 12 months.

Multifamily permitting activity increased 2.2 percent with 14,980 units requested during the past four quarters. For the second consecutive year, submissions were more than the historic annual average of 9,830 units.

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

Delving into theEmployment-Population Ratio via Axiometrics

Many measures of labor market conditions attempting to assess economic conditions are available to economists and analysts. The two best known metrics are the unemployment rate (U3) and the level of monthly employment gain.

The commonly reported U3 rate is a measure of persons classified as unemployed because they do not have a job but have actively looked for work during the previous four weeks. These people are also currently available for work. The November unemployment rate was reported at 7.0%, down from 7.3% in October and 7.8% in November 2012.

The U3 rate does not, however, take into account discouraged workers who have dropped out of the labor force, those marginally attached to the labor force, and those working part time for economic reasons. The combined rate of these metrics currently stands at 13.2%

Read more...Delving into theEmployment-Population Ratio

This May Be the Year the GSEs’ Fate Becomes Clear via Multifamily Executive Magazine

The New Year will bring some changes for Fannie Mae and Freddie Mac, starting with a new federal regulator.

Mel Watt will take over as director of the Federal Housing Finance Agency (FHFA). Also this year: Congress may finally act to transform the two mortgage giants—or tear them apart.

The government-sponsored enterprises (GSEs) continue to make more than a third of all permanent loans to apartment properties, playing a familiar role as the capital markets get back to what feels like normal.

Read more...This May Be the Year the GSEs’ Fate Becomes Clear - Multifamily Executive Magazine

Austin's real estate market looks rosy, experts tout via Austin Business Journal

The 2014 Austin Housing Forecast drew several hundred Realtors, homebuilders and real estate professionals to the Hyatt Regency Hotel Wednesday and the message was positive: The local real estate market is in for another stellar year.

“It’s hard to say anything negative,” said Eldon Rude, one of the speakers and the founder of 360° Real Estate Analytics.

Though Rude was joined by Carlos Rubenstein, chairman of the Texas Water Development Board, and Greg Hallman of the McCombs School of Business at the University of Texas, it was Rude’s housing analysis that drew much of the interest.

The Austin metro area’s population has been growing throughout the recession and is about 1.87 million today.

Read more...Austin's real estate market looks rosy, experts tout - Austin Business Journal

Wednesday, January 8, 2014

Housing Affordability Falls, Signaling an Increase in Housing Supply via Axiometrics

When it comes to analysis of the single-family housing market, it is one thing to discuss construction and sales. But to truly know what is going on with the housing market, an understanding of affordability is important. The U.S. Housing Affordability Index (HAI) is an important tool in this endeavor, as it shows whether families can afford to buy homes.

An index value of 100 indicates that a family earning the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that the family earning the median income has more than enough income to qualify for a mortgage on a median-priced home, assuming a 20% down payment and a qualifying ratio of 25%.

Read more...Housing Affordability Falls, Signaling an Increase in Housing Supply

Top 10 Apartment Market Annual Rent Growth Leaders from 2013 [Video] via Property Management Insider

Where did rents climb the most in 2013? In this video update, Greg Willett and Jay Parsons from MPF Research highlight the nation’s top 10 markets for rent growth in 2013. While many of the usual suspects rank high on the list, there were also a few surprises

Watch video...Top 10 Apartment Market Annual Rent Growth Leaders from 2013 [Video] | Property Management Insider

The Boomerang Generation - Are they ready to rent? via Multifamily Blogs

With the rental market still in recovery mode since the recession real estate managers are wondering when the biggest traditional source of new households - Millennials - will be returning to the market in a significant way. Millennials, those born after 1980, have been hit hard by the economic downturn and there are fears that, having been burned financially in recent years, they are either unable or unwilling to rent. Those who ran to their parents’ nests during the recession potentially represent a significant source of available revenue for the apartment industry. The trick however, is getting them to leave home, somewhere that has the advantages of being cheap, cozy and convenient.

The financial downturn prompted a reversal of the long-standing trend towards moving into rental accommodation. According to reports in the Washington Post the rate at which Americans set up their own homes was cut by more than 50 percent.

Read more...The Boomerang Generation - Are they ready to rent? - Multifamily Blogs

Tuesday, January 7, 2014

Apartment rent goes through roof via HousingWire

According to The Wall Street Journal, apartment landlords continue to push rents higher in many cities. In fact, landlords have wielded the upper hand since the housing crisis began. As the WSJ explains:

Nationwide, landlords raised rents by an average of 0.8% to $1,083 a month in the quarter, according to a report to be released Tuesday by Reis Inc., REIS -0.16% a real-estate research firm. While that is below the previous quarter's 1% increase, it is above the 0.6% gain seen in 2012's final quarter. Rents climbed 3.2% for all of 2013.

Read more...Apartment rent goes through roof | 2014-01-07 | HousingWire

Reis: Apartment Vacancy Rate declined to 4.1% in Q4 2013, Expected to increase slightly in 2014 via Calculated Risk

Reis reported that the apartment vacancy rate declined in Q4 to 4.1% from 4.2% in Q3. In Q4 2012 (a year ago) the vacancy rate was at 4.6%, and the rate peaked at 8.0% at the end of 2009.

Some data and comments from Reis Senior Economist Ryan Severino:
Vacancy declined by 10 basis points during fourth quarter to 4.1%, in line with last quarter's 10 basis point decline. Over the last year the national vacancy rate has declined by 50 basis points, on par with the year‐over‐year rate from the last few quarters. Demand for apartments remains strong four years after the recovery began, even as construction activity has gradually been increasing.

Read more...Calculated Risk: Reis: Apartment Vacancy Rate declined to 4.1% in Q4 2013, Expected to increase slightly in 2014

DFW apartment development, demand on a hot streak via Dallas Business Journal

Dallas-Fort Worth apartment development and demand are on a hot streak, outperforming expectations by analysts.

In the fourth quarter, North Texas developers built 3,074 new apartments, and although demand for apartments typically chills with the weather, the demand roughly kept pace with 2,739 apartments absorbed in the quarter, according to research by Carrollton-based MPF Research, a division of RealPage Inc.

"The Dallas-Fort Worth apartment sector continues to outperform expectations," said Jay Parsons, MPF Research's national market analysis manager, in a written statement. "It's certainly reflective of the strength of the local economy that apartment demand remains so robust at the same time single-family home sales are back to 2007 volumes."

Read more...DFW apartment development, demand on a hot streak - Dallas Business Journal

Monday, January 6, 2014

What to Watch for in 2014 in the U.S. Apartment Market [Video] via Property Management Insider

With a 4.1% annual growth rate in GDP for Q3 2013, the past few monthly job creation reports exceeding expectations, and Moody Analytics speculating that preconditions are in place for much stronger economic growth in 2014, the economic outlook for the country as a whole in 2014 is encouraging.

All this is good news for an apartment sector that is expecting a significant amount of new product to hit the market 2014: scheduled deliveries in the nation’s 100 biggest metros climbed to 234,700 units in 2014.

Watch video...What to Watch for in 2014 in the U.S. Apartment Market [Video] | Property Management Insider

Five Predictions for 2014 via National Real Estate Investor

Prediction No. 1: Economic growth will accelerate

Though growth has been anemic for the last four years, it is poised to increase, albeit at a rate still below the long-term trend of 3.1 percent. But looking at the Q3 growth rate of 4.1 percent provides insights into the multiple divers of growth in this country.

U.S. consumers are better-positioned to increase spending. Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets. With further help from low interest rates, household debt-service burdens are at their lowest level in more than 30 years, according to Federal Reserve data. Household wealth relative to disposable income has surpassed its historical average, according to the Fed, thanks to a pronounced recovery in financial and housing markets. This has given consumers the confidence to spend more of their disposable income, which is growing in line with job creation.

Positive growth sector drivers include the following:

Read more...Five Predictions for 2014 | Institutional Investors content from National Real Estate Investor

Chasing Yield: Secondary, Tertiary Markets to Shine in 2014 via Multifamily Executive Magazine

Denny St. Romain believes the equity space will be fluid this year as some investors fall back while new ones step in.

“I think the opportunistic joint venture equity—they put so much money out in the last two or three years in multifamily development that they’re harvesting and want to see how that goes before they put anymore out,” he says. “But, as for most things in real estate, as some people get out, new people will be in.”

St. Romain, managing director for capital markets at Chicago-based Jones Lang-Lasalle, sees a shift occurring as opportunities cool off in primary markets, and secondary markets become the shining stars of 2014.

Read more...Chasing Yield: Secondary, Tertiary Markets to Shine in 2014 - Multifamily Executive Magazine

CRE Will Stay On Road to Recovery in 2014 via

The US real estate recovery is set to continue along the path of recovery this year, with investors increasingly looking beyond some of the traditionally popular markets to secondary markets in search of higher yields, according to Emerging Trends in Real Estate 2014, co-published by PwC and the Urban Land Institute.

The predicted growth in secondary markets will stem from investors searching for returns as opportunities in core markets become harder to find and the best assets become more expensive, according to the report’s findings, which stem from an industry survey. As a result, it’s anticipated that 2014 may be the year that many investors who have traditionally focused mainly on large established markets such as Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, DC will expand their focus to other cities in order to protect capital. This trend, first noted in last year’s Emerging Trends report, is likely to build substantial momentum this year given the steady pace of improvement in market fundamentals in secondary markets and with more investments in those markets meeting investors’ risk/return metrics.

Read more...CRE Will Stay On Road to Recovery in 2014 - Daily News Article -

Friday, January 3, 2014

Texas Economic Indicators January 2014 via Dallas Fed

The Texas economy continues to expand, with employment growing at a 2.3 percent annual rate in November. Texas housing starts spiked in November, while existing-home sales and single-family construction permits declined. Texas exports rose in October. Manufacturing activity increased for the eighth month in a row in December, according to the Texas Manufacturing Outlook Survey.

Texas gained 21,700 jobs in November after adding 26,400 jobs in October. Current Texas employment stands at 11.29 million, according to the payroll survey (CES).

The Texas unemployment rate declined to 6.1 percent in November from 6.2 percent in October. The Texas rate remains lower than the U.S. rate, which was 7.0 percent in November.

Read more...Texas Economic Indicators January 2014 via Dallas Federal Reserve

Thursday, January 2, 2014

U.S. Apartment Market Ends 2013 with Tight Occupancy and Moderate Rent Growth via Property Management Insider

Going into 2013’s 4th quarter, the U.S. apartment sector entered a period of vulnerability – with lots of new supply scheduled to complete during what are traditionally the slowest months for apartment demand. So how did the apartment sector hold up?

The good news is that the U.S. apartment sector’s performance remained healthy at the end of 2013, with MPF Research reporting tight occupancy and moderate rent growth at the end of 2013.

In this exclusive video report, Greg Willett and Jay Parsons from MPF Research highlight the nation’s latest apartment occupancy and rent growth statistics as well as other key performance indicators.

Read more...U.S. Apartment Market Ends 2013 with Tight Occupancy and Moderate Rent Growth | Property Management Insider

Cap Rate Outlook: Inflation vs. Investor Demand via Multifamily Executive Magazine

Cap rates often rise when interest rates rise, but that may not be the case in many markets in 2014.

In the short-term, continued strong demand from equity investors should keep in check any potential hikes to cap rates that buyers hope will accompany higher debt costs.

Most finance experts are skeptical that moderately rising long-term mortgage rates over the coming year would have much if any impact on the apartment sector’s equity yields and capitalization rates—particularly among Class A product where interest is so strong. However some expect that higher debt rates would put upward pressure on capitalization rates of smaller and lesser-positioned properties that attract more high-leverage buyers.

Read more...Cap Rate Outlook: Inflation vs. Investor Demand - Multifamily Executive Magazine

NMHC: Older Renters to Drive Demand in Next Decade via Multi-Housing News Online

Younger renters have long been the prized demographic for apartment owners, but there’s some indication that an older demographic is going to be an increasingly important segment for landlords in the coming decade, according to a research note published recently by the National Multi Housing Council. That is, the aging baby boom demographic might make itself felt in the rental market as its members downsize from home ownership.

The baby boom generation remains the demographic bulge that it’s been since U.S. birth rates, which dropped precipitously during the Depression in the 1930s, spiked during the prosperity of the 1950s. After another trough in the 1970s, the number of U.S. births has roughly stabilized at around 4 million a year.

Read more...NMHC: Older Renters to Drive Demand in Next Decade | Multi-Housing News Online