Apartment List: How Houston apartment rents fared in 2015 via Houston Business Journal

As another year comes to a close, Apartment List took a look at how Houston’s apartment rents fared in 2015.

Apartment rent growth is slowing amid the oil slump, which comes as housing affordability has become a major concern for renters and city leaders in Houston, according to the San Francisco-based online marketplace.

Read more...Apartment List: How Houston apartment rents fared in 2015 - Houston Business Journal

Landlords Face Slowing Price Gains After U.S. Records Shattered via Bloomberg Business

For commercial real estate investors, the good times may be over.

The Federal Reserve’s first interest-rate increase in nine years has removed a crutch that’s helped sustain 33 consecutive months of price growth of at least 10 percent and padded returns for buildings from office towers to luxury hotels. While values won’t necessarily fall, they aren’t likely to climb much higher next year, according to Tad Philipp, a commercial-property debt analyst at Moody’s Investors Service.

“A lot of the smart money is saying it’s a better time to sell than to buy,” Philipp said in an interview. “The warning light is on that the rate of appreciation is poised to decelerate.”

Read more...Landlords Face Slowing Price Gains After U.S. Records Shattered - Bloomberg Business

Breaking Supply Wave, Potential Volatility Expected to Test Apartment Market Resilience in Coming Year via CoStar Group

If current projections hold, a total of about 455,000 new apartment units will be added to the inventory in the top 54 markets making up CoStar's national index from the beginning of 2015 through the end of the coming year. Despite the elevated new supply rolling into almost every U.S. metro, continued strong demand from renters is enabling landlords to push up rents in many markets.

As a result of the intense development focus on urban markets, apartment vacancies are beginning to edge higher in certain CBD and secondary business districts, setting the stage for suburban and non-CBD urban locations, such as Oakland, CA, to see more occupancy and rent appreciation. Vacancy rates in these non-CBD locations are expected to remain at least 50 basis points below those in business districts, according to CoStar projections.

Read mmore...Breaking Supply Wave, Potential Volatility Expected to Test Apartment Market Resilience in Coming Year - CoStar Group

Dallas: A Market with Multifamily Staying Power via REBusinessOnline

Right now, the Dallas-Fort Worth metropolitan statistical area is one of the hottest multifamily markets in the country with an eye-opening 34,000-plus units currently under construction. Long-term trends suggest that even if construction slows somewhat, demand for north Texas apartments will outstrip supply for the foreseeable future.

The reason is straightforward. Dallas has much going for it that employers find extremely appealing, including a central location equidistant from both coasts, an educated workforce, a diverse economy and a favorable business climate. These underlying advantages are simply not going to change.

Read more...Dallas: A Market with Multifamily Staying Power | REBusinessOnline

Texas hunkers down for another oil bust via CNBC

It's easy to see what Texas is bracing for: another oil bust.

But there are early signs the latest crash in crude may not inflict as much damage on Texas as past energy downturns, especially in parts of the Lone Star State that have diversified away from energy-related goods and services.

After California, Texas is the largest economy in the U.S. At nearly $1.5 trillion in gross state product last year, Texas produced more goods and services than South Korea or Australia.

Read more...Texas hunkers down for another oil bust

What the Middle Class Money Squeeze Means for the CRE Industry via NREI

The American middle class is losing its hold on the reins of the U.S. economy, not only because of the drop in incomes and net wealth, but also because the commercial real estate industry is catering to the luxury and working class consumers instead.

According to a recent Pew Research Center study, the recession and the housing crisis hit the middle class hard, erasing its wealth gains from the three decades prior. The middle class is defined by the study as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three. This group of people fell from 61 percent of the U.S. population in 1971 to 50 percent in 2015, as the group defined as upper class doubled to 9 percent of the population and the lower-income tier rose from 16 percent to 20 percent of the population during the same timeframe.

Read more...What the Middle Class Money Squeeze Means for the CRE Industry

Regional Economic Outlook Remains Mixed Going into 2016 via Dallas Fed

The Texas economy picked up slightly after weakening at the end of the summer. Employment grew an annualized 2.2 percent in October on top of a revised 1.5 percent in September. The Texas Manufacturing Outlook Survey (TMOS) points to a pickup in manufacturing activity, while the Texas Service Sector Outlook Survey (TSSOS) continues to suggest sustained moderate growth in services. Despite a renewed decline in oil prices and continued strength in the Texas trade-weighted value of the dollar, the Texas economy is expected to grow at a modest pace in coming months.

Read more...Regional Economic Outlook Remains Mixed Going into 2016 - Dallas Fed

Texas Added 11,100 Jobs in November; State Employment Forecast Remains 1.3% for 2015 via Dallas Fed

Texas added 11,100 jobs in November, according to seasonally adjusted and benchmarked payroll employment numbers released today by the Federal Reserve Bank of Dallas.

The state added a revised 19,500 jobs in October. Through November, jobs have grown at an annualized pace of 1.3 percent after growing 3.6 percent in 2014.

Incorporating November’s employment data, the Texas employment forecast stands at 1.3 percent, suggesting 150,500 jobs will be added in Texas this year. The forecast remained unchanged from October.

Read more...Dallas Fed: Texas Added 11,100 Jobs in November; State Employment Forecast Remains 1.3 Percent for 2015 - Dallas Fed

Lawler: "Yes, Houston will have a problem next year" via Calculated Risk

Some thoughts on the Houston housing market from housing economist Tom Lawler:

Earlier this week I sent out a message with a link to the Houston Association of Realtors report showing that MLS-based home sales in the Houston metro market showed a double digit YOY decline for the second straight month in November, and that total property listings were up by over 20% from a year earlier.

Here are some other “macro” numbers (in table or graph form) for the Houston metro area.

Read more...Calculated Risk: Lawler: "Yes, Houston will have a problem next year"

Class B Becoming Option A for Renters via GlobeSt.com

In 2016, developers will probably continue their recent focus on creating luxury developments, and push many renters to seek older class B communities that offer similar services and amenities at a more affordable price.

“Today's class B apartment is yesterday's class A apartment,” Peter Vilim, co-founder of Waterton, tells GlobeSt.com. For decades, his Chicago-based company has been taking over top-of-the-line, but slightly older properties, and adding little touches and updates. “That effectively delivers a class A experience in a building considered class B due to its age.”

Read more...Class B Becoming Option A for Renters - Daily News Article - GlobeSt.com

Opposing Perspectives Drives Multifamily Activity via GlobeSt.com

The multifamily market has several good years left to go—that is the consensus view from investors, industry observers, and agency officials who participated in Capital One’s recent industry survey at the RealShare Apartments conference in Los Angeles.

The optimistic picture emerging from the survey has some interesting nuances that could shape the way investors look at the market through 2018. In our first of four posts, Capital One Multifamily Grace Huebscher, who spoke at the event, weighs in on the hardening of divergent views on the market’s future.

Read more...Opposing Perspectives Drives Multifamily Activity - Daily News Article - GlobeSt.com

ALN Monthly Newsletter December 2015 via ALN Apartment Data

ALN Data just released their November 2015 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter December 2015 via ALN Apartment Data

CBRE Houston multifamily on-line, just in time 3Q 2015 via Real Estate Center at Texas A&M

Robust demand over the past several years created an urban renaissance for Class A renters as developers aimed to keep pace with new product — and Houston is now seeing the result as these deliveries arrive on-line — just in time as job growth has slowed, albeit only for the time being.

Houston saw an additional 3,000 units break ground in 3Q 2015, up from 2Q 2015 and 56 percent of the units presently under construction are expected to deliver within six months and in 2016 Houston will continue to see a high number of deliveries with approximately 17,000 units slated to deliver.

Read more...CBRE Houston multifamily on-line, just in time 3Q 2015

Houston Economic Indicators December 2015 via Dallas Fed

Employment in health, restaurants and bars, and construction-related sectors continues to offset the negative impacts of low oil prices on the region’s economy. With low fuel prices, population growth, an improving U.S. economy and ongoing weakness in oil and gas drilling, the outlook for the region remains mixed but tepid overall.

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

Apartment Rents Higher Above Trend Line than House Prices via Axiometrics

Apartment rents are climbing at a faster rate than new-home prices, according to a comparison of pricing generated through Census Bureausingle-family data and Axiometrics’ apartment data.

The Census Bureau calculates a price index for new home sales that is shown in the following chart, using data from its Survey of Construction. The survey collects information on the physical characteristics and prices of new single-family houses gathered from monthly interviews with builders or owners of a national sample of new houses. The base year for the index is 2005, but the price data begins in 1963.

Read more...Apartment Rents Higher Above Trend Line than House Prices

Boomers Will Drive Apt. Growth via GlobeSt.com

The Baby Boom generation will lead the way in apartment demand growth, followed by Millennials, says a new research report from Yardi Matrix. The report also notes that demand for rental housing seems likely to increase strongly “for another decade? or more.”

Prepared by Paul Fiorilla, associate director of research at Yardi Matrix, the report says Boomers have been “underrated” in the discussion around multifamily demand, which has tended to focus on Millennials. Yet the 50-plus age cohort is projected to grow twice as fast over the next 15 years as the number of Americans ages 25 to 49, and Boomers have been renting in increasing numbers as they approach retirement age.

Read more...Boomers Will Drive Apt. Growth - Daily News Article - GlobeSt.com

Why it’s so hard to afford a rental even if you make a decent salary via The Washington Post

Last year in America, the median asking rent for a newly built apartment was an astonishing $1,372 a month. That's about 50 percent more than the typical rent nationwide. It marked a dramatic rise from what brand-new apartments were renting for just a few years ago.

And the steep sum shows a troubling disconnect in the country's rental market: While pressure has been building on low- and moderate-income households struggling to find affordable housing, we have mostly been building new supply tailored for the wealthy.

Read more...Why it’s so hard to afford a rental even if you make a decent salary - The Washington Post

Dallas Beige Book 12/2/15 via Dallas Fed

The Eleventh District economy grew at a modest pace over the past six weeks. Most respondents in manufacturing and services reported that demand either held steady or increased. Auto sales rose while reports on broader retail sales were mixed. A seasonal slowdown occurred in home buying, but broader real estate activity remained strong overall, except for some weakness in Houston. Energy activity was still depressed. Price pressures remained subdued and employment held steady or increased.

Read more...Dallas Beige Book - Dallas Fed

Austin Economic Indicators December 2015 via Dallas Fed

Growth in the Austin economy moderated slightly in October but remained strong. The Austin BusinessCycle Index continued to expand, and job growth accelerated to a brisk 5 percent annualized rate. The unemployment rate rose for a second month but is still indicative of a tight labor market. Manufacturing remains weak, and leisure and health care have slowed from a rapid pace of growth earlier in the year. Healthy expansion in construction, high-tech and other industries should continue to propel the local economy the rest of this year.

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

MF Rent Growth Remains Flat via GlobeSt.com

In keeping with normal seasonal patterns, US multifamily rent growth was basically flat in November, just as October was unchanged from the month before. However, Yardi’s latest Matrix Monthly report, released Friday, also shows a near-term deceleration in the hottest markets as well as the effects of supply growth.

November’s national average of 111 apartment markets covered by Yardi Matrix showed a $1 decline in rents to $1,165 per month. Rents increased by 6.4% year-over-year in November, representing a 30-basis-point decline from October but 190 bps higher than the year-ago period.

Read more...MF Rent Growth Remains Flat - Daily News Article - GlobeSt.com

Multifamily Lending Brief: Q3 2015 via Property Management Insider

In the wake of the great recession, the entire financing environment shifted to benefit the multifamily industry. As such, MPF Research will provide high-level, but relevant updates on an on-going, quarterly basis. These updates include details on loan balances by lending category, overall market share, delinquency rates, as well as activity from Fannie Mae and Freddie Mac.

Read more...Multifamily Lending Brief: Q3 2015 | Property Management Insider

The U.S. Could Build a Lot More Apartments via Bloomberg View

Developers are putting up new apartment buildings in the U.S. as fast as they were before the real estate crisis. Yeah, there was a decline in multi-family construction in October, probably because of flooding in the South. But overall the picture from the Census Bureau's monthly building permits data has been one of growth.

By contrast, building permits for single-family homes, while they too have been on the rise, are still only at about 40 percent of the peak they hit in September 2005.

Read more...The U.S. Could Build a Lot More Apartments - Bloomberg View

Affordability Fears: Overhyped and Misdirected via GlobeSt.com

In a July 31 earnings call, Camden Property Trust CEO Rick Campo was asked directly about the risk of rising rents pushing apartment renters out the door.

His tongue-in-cheek response: Camden renters “have the ability to pay higher rents and we want to give them that opportunity.”

Campo’s answer was a succinct rebuttal to the widely accepted narrative of runaway rents pushing renters to the ceiling of affordability. There’s abundant evidence that market-rate apartments, on the whole, are nowhere near an affordability crisis. And these misdirected fears are distracting attention from a distinctly separate and far more worrisome problem—the nation’s severe shortage of designated affordable housing units.

Read more...Affordability Fears: Overhyped and Misdirected - Commentary Article - GlobeSt.com

Apartment Renter Preferences Revealed via National Real Estate Investor

What are your apartment renters really thinking? A new survey shows the amenities that renters want the most and are willing to pay for. It also shows how renters hunt for apartments and pay attention to the social media efforts of property managers. The National Multifamily Housing Council (NMHC) partnered with real estate research and consulting firm Kingsley Associates to survey nearly 120,000 apartment residents, as a follow-up to their first Renter Preferences Survey, released in 2013.

The results match what some apartment experts have observed for years. Residents value some amenities at their apartment buildings much more than others.

Read more...Photo Gallery: Apartment Renter Preferences Revealed | National Real Estate Investor

New Largest-Ever Apartment Rental Survey Highlights Amenities Renters Can’t Live Without via MultifamilyBiz.com

The rise of apartment living is changing communities, driving new development and raising the expectations for the amenities and services offered to the 38 million people in the U.S. who call an apartment home. From walkable neighborhoods to on-site fitness classes, package pick-up solutions to online rent payments and more, new data from the largest-ever survey of apartment residents gives a detailed picture of what apartment residents want—and even what they’d expect to pay for it.

The National Multifamily Housing Council/Kingsley Associates 2015 Apartment Resident Preferences Survey analyzes data from nearly 120,000 respondents across the country about their priorities for home features, community amenities and more based on a variety of demographic factors. Comprehensive analysis is also available for 44 local markets.

Read more...New Largest-Ever Apartment Rental Survey Highlights Amenities Renters Can’t Live Without | MultifamilyBiz.com

Renters Expect More Amenities via GlobeSt.com

Their rents may be increasing at the fastest pace in almost a decade, yet US apartment renters continue to prefer to renew their leases rather than move elsewhere. “For all the noise about affordability, there isn’t yet any real evidence that market-rate apartment renters are unable or unwilling to renew their leases,” says Jay Parsons, director of analytics for Carrollton, TX-based MPF Research.

That being the case, a new study from the National Multifamily Housing Council finds that renters bring heightened expectations to the table when they sign those leases. “There have been 1.6 million new renter households created in the past five years,” says Rick Haughey, VP of industry technology initiatives with NMHC in Washington, DC. “Many of these new residents are making a lifestyle choice to rent instead of buy and are thus looking for personalized services and amenities. The apartment industry is stepping up to provide those experiences.”

Read more...Renters Expect More Amenities - Daily News Article - GlobeSt.com

Red Hot Apartment Market Sees Higher Rent Growth and Average Occupancy Rates Above 95% via MultifamilyBiz.com

Apartment annual effective rent growth was the strongest of any October since the Great Recession, even though the October 2015 rate moderated to 4.9% from the 5.2% recorded in September, according to Axiometrics, the leader in apartment and student housing market research and analysis.

The national October rate is the lowest monthly rate recorded in 2015; when extended to two decimals, October's annual effective rent growth of 4.88% was 1 basis point (bps) below January's 4.89%.

Read more...Red Hot Apartment Market Sees Higher Rent Growth and Average Occupancy Rates Above 95% | MultifamilyBiz.com

Houston Economic Indicators November 2015 via Dallas Fed

The Houston Business-Cycle index declined an annualized 1.9 percent in September. That is the first drop since April’s 5.1 percent decline. Soft employment and help wanted advertising data last month were met with real estate metrics that suggest the slowdown in energy so far has only modestly affected a still-healthy real estate market. Altogether, the outlook for Houston remains tepid.

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

Multifamily Investment via CCIM Institute

By all accounts, the multifamily investment sales market has been on a bull run in recent years. The fact that the sector was the leader in the real estate recovery and continues to produce solid occupancies and rent growth has caught and held investor interest. And despite stiff competition and record sale prices in many metros, buyers’ voracious appetite for apartments has not diminished.

Read more...Multifamily Investment | CCIM Institute

Multifamily Lending Starting to Level Off via National Real Estate Investor

Lenders will keep pouring money into apartment properties over the next two years, originating about the same volume of loans in 2016 and 2017—with slight increases—that they are likely to close in 2015, according to the latest Commercial/Multifamily Real Estate Finance Forecast from the Mortgage Bankers Association (MBA), an industry trade group.

“The forecast anticipates continued strength and growth,” says Jamie Woodwell, vice president for the research and economics group at MBA.

That’s still going to be a big change from the last few years, when business of lending on multifamily real estate didn’t just grow a little, but instead grew incredibly quickly.

Read more...Multifamily Lending Starting to Level Off

Apartment rent, and demand, still rising in Austin via Austin Business Journal

Austin holds the distinction of being the most expensive residential market in the state. While that might be good news for many professionals in the city’s real estate community, it certainly pinches the pocketbook of would-be homeowners.

According to the latest Marcus & Millichap Apartment Research Market Report, while median household income in Austin is high enough to afford a median-priced home in the market, home prices in Austin’s core fall well out of range for potential homebuyers. This has created a sharp demand for apartments near employment and cultural districts in the city.

Read more...Apartment rent, and demand, still rising in Austin - Austin Business Journal

ALN Monthly Newsletter November 2015 via ALN Apartment Data

ALN Data just released their October 2015 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter November 2015 via ALN Apartment Data

Is the CRE Market Beginning to Soften? via GlobeSt.com

Auction.com’s first CRE Nowcast, a pricing index that combines the firm’s proprietary transaction database, Google Trends data and investor surveys to forecast CRE pricing trends in real time, shows that October commercial valuations saw the smallest increase in nearly five years. The index also showed that prices declined in two of the five property segments studied.

However, the news is not all gloom and doom. Three property segments saw valuations in the month, with office growing by 50 basis points, industrial by 200 basis points and hotels by 120 basis points, according to the new pricing index. Retail valuations were off slightly, down 20 basis points, while apartments was the weakest of all sectors, down 250 basis points.

Read more...Is the CRE Market Beginning to Soften? - Daily News Article - GlobeSt.com

Rent: Natural Vacancy Rates in Major Texas Markets via Real Estate Center at Texas A&M

Like labor markets that include employed and unemployed persons, real estate markets include rented and vacant properties available for rent. Owners and managers of rental properties generally keep an inventory of vacant properties that can be rented on short notice. Because this practice is costly, finding optimal levels of vacant inventories is essential.

An ongoing research project at the Real Estate Center at Texas A&M University has developed a number of economic models of the relationships between supply and demand for rental properties and their rents in Texas real estate markets. The concept of natural vacancy rate is a useful framework for estimating the relationships between changes in vacancy rates and rents.

Read more...Rent: Natural Vacancy Rates in Major Texas Markets

First-time Buyers Continue to Retreat from U.S. Housing Market via WORLD PROPERTY JOURNAL

According to an annual survey by the National Association of Realtors (NAR), the share of first-time buyers declined for the third consecutive year and remained at its lowest point in nearly three decades as the overall strengthening pace of home sales over the past year was driven more by repeat buyers with dual incomes. The survey additionally found that nearly 90 percent of all respondents worked with a real estate agent to buy or sell a home; which pushed for-sale-by-owner transactions to their lowest share ever.

The 2015 National Association of Realtors Profile of Home Buyers and Sellers continues a long-running series of large national NAR surveys evaluating the demographics, preferences, motivations, plans and experiences of recent home buyers and sellers; the series dates back to 1981. Results are representative of owner-occupants and do not include investors or vacation homes.

Read more...First-time Buyers Continue to Retreat from U.S. Housing Market - WORLD PROPERTY JOURNAL Global News Center

Economist Ray Perryman: Dallas shines as ‘economic center of the Sunbelt’ via Dallas Business Journal

The U.S. economic recovery, as lackluster as it may sometimes appear, is not fixing to fizzle out, renowned Texas economist Ray Perryman told Dallas-Fort Worth business leaders Wednesday.

The nation is 68 months into a recovery, and the good news is, “recoveries don’t die of old age,” Perryman said at a Dallas Regional Chamber breakfast at the Adolphus Hotel in downtown Dallas.

Read more...Economist Ray Perryman: Dallas shines as ‘economic center of the Sunbelt’ - Dallas Business Journal

Austin Economic Indicators November 2015 via Dallas Fed

Growth in the Austin economy slowed in September. The Austin Business-Cycle Index decelerated but maintained an above-average growth rate, while jobs increased modestly. The unemployment rate ticked up but continued to reflect a tight labor market. Improvement in construction activity and real estate, along with robust growth in high-tech services, suggests continued strength in the Austin economy for the remainder of the year.

The business-cycle index expanded at a 7.7 percent annualized rate in September. Although index growth has tapered off since peaking at 9.9 percent in January, it remains well above its 20-year average of 5.8 percent, indicating above-trend expansion in the local economy.

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

CRE Investors Ponder If Now is Best Time To Exit Houston via CoStar Group

Houston remains the major market aberration in the ongoing recovery across the U.S. commercial real estate market. The unexpectedly long duration of lower oil and gas prices has long since curtailed growth in the once market-leading economy, which has made investors in public REITs with exposure to the big Texas energy market nervous.

The oil price plunge that hit a year ago has so far spoiled the performance of industrial, multifamily and hotel segments more so than the office and retail segments. And now publicly held REITs in each property sector are trying to decide whether to pare their exposure to the market, or shift their leasing strategies while they decide whether or not to ride out the latest cycle.

Read more...CRE Investors Ponder If Now is Best Time To Exit Houston - CoStar Group

The Rise of Renters: Housing in the Decade Ahead via National Real Estate Investor

There are now more Americans renting than at any other time in U.S. history. Over the last decade, the share of renter households in the U.S. has increased significantly as homeownership rates have fallen from 69.2 percent in 2004 to 63.4 percent in 2015, the lowest level since 1967, according to a recent joint report by the Joint Center for Housing Studies of Harvard University and Enterprise Community Partners. In addition, it is projected that over the next decade, the majority of new household formation will be renters, a reversal from the trend of the past few decades. As such, the demand for rental housing will continue to grow. In addition, renters will be coming from more diverse socioeconomic backgrounds.

The net increase in the rental housing inventory has not kept pace with demand and therefore vacancy rates have declined and rents have risen significantly over the past few years. Unfortunately, for most renters, household income tends to be significantly lower than that of homeowners and their wage growth has not kept pace with rent growth.

Read more...The Rise of Renters: Housing in the Decade Ahead

Apartment List report: Nearly half of Houston renters live in unaffordable apartments via Houston Business Journal

Nearly half of Houston renters can’t afford to live in their apartment, according to a new national report.

Apartment List, a San Francisco-based online apartment portal, analyzed U.S. Census data from 50 major cities across the country and ranked them by the share of apartment renters who are considered “cost- or rent-burdened.” Apartment residents who spend more than 30 percent of their household income on rent are considered cost-burdened, according to the government.

Nearly half — 49.7 percent — of Houston apartment dwellers were rent-burdened in 2014, the most recent data available from Apartment List. That’s slightly higher than the Texas average of 48.9 percent, but lower than the national average of 51.8 percent.

Read more...Apartment List report: Nearly half of Houston renters live in unaffordable apartments - Houston Business Journal

Nadji: MF Demand ‘From All Directions' via GlobeSt.com

Between young adults who are moving out of their parents’ houses and the parents themselves, now facing empty-nest syndrome, “demand is coming from all directions” for multifamily, Marcus & Millichap’s Hessam Nadji said on BloombergTV last week. The GlobeSt.com Thought Leader enumerated the ways in which this demand is becoming evident, including what he termed a long-term “structural change” toward renting versus owning as well as investment sales pricing that’s now about 33% above the 2007 peak.

“The apartment investment market has been white hot; what’s really important is that the fundamentals have also followed the pricing,” said Nadji, senior EVP at MMI. “If you look at the effective rents that apartments are generating, they’re up about 25% above the prior peak as well. Prices didn’t just go up without the accompanying rent growth.”

Read more...Nadji: MF Demand ‘From All Directions’ - Daily News Article - GlobeSt.com

Region Continues to Grow Despite Renewed Energy Headwinds via Dallas Fed

The Texas economy is growing at a modest pace after slowing from a slight acceleration near mid-year. Employment picked up in September to an annualized 1.4 percent pace after posting essentially no growth in August. The Texas Business Outlook Surveys (TBOS) point to continued weakness in the manufacturing sector and moderate strength in services.

The headwinds of declining energy markets and a strengthening dollar have continued to dampen growth prospects for the region. Metropolitan areas tied to oil and gas, such as Houston, or manufacturing, such as Fort Worth, saw weak job growth in August and September. Despite this, job growth in most other large metro areas remains robust, and growth for Texas overall should remain positive for the remainder of this year and into 2016.

Read more...Region Continues to Grow Despite Renewed Energy Headwinds - Dallas Fed

Apartment Volume Continues Sliding in September via Multifamily Executive Magazine

After a recovery in August, sales of apartment properties fell 11% year over year in September, according to Real Capital Analytics’ (RCA's) most recent market report.

“This decline comes on the heels of a slowdown since May in the growth in sales volume for the apartment sector,” RCA said in the report.

RCA said the average monthly pace of sales growth in the first quarter of 2015 was 73% year over year. But in the second quarter, that number fell to 23% year over, and in the third quarter, it dropped to 5% year over year. Private investors have driven volume throughout the year.

Read more...Apartment Volume Continues Sliding in September | Multifamily Executive Magazine | Cap Rates, Capital Markets, Dispositions and Transactions, Sales, Transactions, Real Capital Analytics

Apt. Rent Growth Flattens in Oct. via GlobeSt.com

It appears to be a seasonal occurrence. Along with Halloween and the end of Daylight Saving Time, this time of year brings a flattening of apartment rent growth. Yardi’s latest Matrix Monthly report shows that US multifamily rents held at an average $1,166 for October, unchanged from the month before.

October’s rent performance in this regard followed a pattern seen in the past two years, according to Yardi. Along with October representing the first month this year in which rents did not rise month over month, it also represented a slightly lower rate of year-over-year growth at 6.7%, 10 basis points shy of September’s rate, which marked a post-recession high watermark.

Read more...Apt. Rent Growht Flattens in Oct. - Daily News Article - GlobeSt.com

Texas Manufacturing Activity Increases in October After Nine-Month Slump, Says Dallas Fed Surv via Dallas Fed

Texas factory activity increased in October after nine months of flat or declining output, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

The production index—a key measure of state manufacturing conditions—rose to 4.8, marking the first month of output growth this year.

Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.

Read more...Texas Manufacturing Activity Increases in October After Nine-Month Slump, Says Dallas Fed Surv - Dallas Fed

Apartment Boom Nears Its End via GlobeSt.com

Senior housing economist David Schulman published an economic letter in the UCLA Zinman Center for Real Estate with some compelling observations about the home market. Most notably, Schulman predicts that the apartment boom will start to see strain by the end of 2016 as the homeownership market picks up and puts downward pressure on rents. He expects new construction levels to negatively impact apartment vacancies.

“Our guess is that the old average of 1.5 million units will be the new peak in the coming years. Longer-term demographics and affordability issues are beginning to work against the demand for housing,” Schulman tells GlobeSt.com. “With developers building for the top of the market for high-income renters, they may not yet to be cognizant of this trend, but they will soon find out that the high-end apartment market might not be as deep as they think.”

Read more...Apartment Boom Nears Its End - Daily News Article - GlobeSt.com

Affordable Housing: Lowest Income Households Most Exposed in Supply Shortage via Property Management Insider

The number of renter households grows and multifamily construction continues to be robust, but the lack of designated affordable housing remains a pressing issue for the multifamily industry. Strong absorption of market-rate apartments continues to place pressure on households that must rely on affordable housing. More specifically, latest data from the American Housing Survey indicate households with extremely low incomes (30% of area median income and less) are feeling the most stress, as this group has grown faster than the supply of designated affordable product entering the market and higher income households have more choices in terms of location and product class in local apartment markets.

Read more...Affordable Housing: Lowest Income Households Most Exposed in Supply Shortage | Property Management Insider

DFW Economic Indicators October 2015 via Dallas Fed

The Dallas–Fort Worth economy expanded at a fast clip to close the third quarter. The metroplex created jobs at a 2.1 percent rate in the quarter, outpacing both the state at 1.6 percent and the nation at 1.4. Home prices rose further in July, and activity in the office market remained solid in the third quarter. Unemployment held steady in Dallas but ticked up in Fort Worth in September. Dallas Fed business-cycle indexes point to continued growth for the metroplex.

Read more...DFW Economic Indicators October 2015 via Dallas Fed

5 Tips to Saving Big Money Managing Apartment Utilities via Property Management Insider

More and more, all eyes are on energy and water usage. Investors, property owners and even residents pay close attention to utility bills. In some areas, local and state regulators require that energy performance be reported to the Environmental Protection Agency.

The impact of utilities may seem to affect either the property or resident, but it actually touches both. Certainly, the effect of utilities on an apartment’s operating costs varies depending on whether the community is master-metered or individual-metered. In the National Apartment Association’s 2015 Income & Expense Survey, only 3 percent of a property’s total expenses are from utilities if the property is individual-metered, compared to 8.1 percent – third-highest – for master-metered.

Read more...5 Tips to Saving Big Money Managing Apartment Utilities | Property Management Insider

Rent.com 2015 Rental Market Report via PropertyManager.com

Rent.com just released it’s annual market report citing research done on hundreds of property managers, thousands of rental properties, and hundreds of thousands of rental units across the country. The current rental market is experiencing the lowest vacancy rates in nearly 20 years. This is good news for property managers, who have reported a decrease in their rental vacancies. There are more prospective tenants to choose from and less of a need to negotiate rental prices. Rental rates continue to rise, making it a great time to be a property manager.

Read more...Rent.com 2015 Rental Market Report | PropertyManager.com

Houston Economic Indicators October 2015 via Dallas Fed

The Houston Business-Cycle Index declined at an annual rate of 1.9 percent in August. July’s growth rate was revised down from 5.9 percent to 4.4 percent. Upstream energy (oilfield-related employment and manufacturing) weakness continues to be at least partially offset by strength in downstream energy (refining and petrochemicals). Leisure and hospitality and health care, two sectors driven in part by Houston’s robust population growth, also continue to log solid gains. On whole, the outlook for Houston is for job growth to remain flat.

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

Texas job growth spiked for the month, year in September via Dallas Business Journal

Employers in Texas added jobs for the seventh consecutive month in September. During the month of September, Texas added 26,600 nonfarm seasonally adjusted jobs. Over the past year, Texas employers have increased payrolls by 224,800 positions since September 2014.

“With the Texas economy continuing to generate a steady growth of jobs, our employers and jobseekers have a definite competitive advantage when seeking the many opportunities available in our Lone Star State,” said Texas Workforce Commission Chairman Andres Alcantar in a news release.

Read more...Texas job growth spiked for the month, year in September - Dallas Business Journal

Special Report: How Long Will Multifamily Defy Gravity? via Commercial Property Executive

Are multifamily developers and investors getting out over their skis?

At a time of sky-high optimism in the sector, only a minority would probably answer “yes.” Yet in sizing up today’s favorable economic and demographic trends, a trio of experts grappled with that question at a national conference in Las Vegas last week.

Ryan Severino, the senior economist & director of research for REIS Inc., offered particularly strong caveats about Class A supply and demand during the annual event organized by Multifamily Executive. “It’s going to be very challenging going forward because everybody and their mother is building apartments today,” Severino warned his audience of several hundred professionals on Oct. 6. “Be careful—it’s not going to be as easy over the next four or five years.”

Read more...Special Report: How Long Will Multifamily Defy Gravity? | Commercial Property Executive

Dallas Beige Book October 2015 via Dallas Fed

The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturing demand increased, and retail and auto sales grew. Demand for nonfinancial services held steady or improved, except for some transportation services. Real estate activity remained solid overall, and loan demand rose steadily. Demand for oil field services was still depressed, and lower oil prices dampened outlooks. Price pressures remained subdued and employment held steady or increased.

Read more...Dallas Beige Book - Dallas Fed

ALN Monthly Newsletter October 2015 via ALN Apartment Data

ALN Data just released their September 2015 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter October 2015 via ALN Apartment Data

Multifamily Prices Could Stall With Interest Rate Hike via NREIonline.com

Apartment property prices may finally stop rising—and even begin to fall—when interest rates start going up.

“The assumption is that capitalization rates would jump higher with interest rates,” says Luis Mejia, chief multifamily economist with research firm CoStar Group.

But the rise in cap rates is likely to come very, very slowly. Cap rates on apartment properties have been going from low to lower for years as apartment prices climbed steadily higher. However, federal officials might soon make a change to benchmark interest rates—the Federal Reserve had strongly hinted it might raise rates at its September meeting. Bad news from the world economy delayed the action, but officials are still likely to raise rates by the end of the year. Higher interest rates usually mean higher cap rates.

Read more...Multifamily Prices Could Stall With Interest Rate Hike

What’s Really Driving the Urbanization Trend? via GlobeSt.com

For commercial real estate developers, urbanization is the new black. Of course, it’s not urbanization for urbanization’s sake. Savvy developers are following—and fueling—this trend.

For decades, most Americans settled in the suburbs. Now, there’s a mass exodus—or at least a growing movement—toward urban cores. According to Census Bureau data, American cities are witnessing a renaissance, of sorts, as residents migrate to downtown areas.

Read more...What’s Really Driving the Urbanization Trend? - Daily News Article - GlobeSt.com

Despite Looming Clouds, Bright Forecast for U.S. Real Estate via Urban Land Magazine

The latest ULI Real Estate Consensus Forecast calls for relatively smooth sailing ahead as it relates to both continued economic growth and a favorable outlook for commercial real estate investment. Yet, the forecast is not as bullish as it was six months ago, and there are headwinds looming that are expected to temper growth heading into 2017.

The forecast, produced by the ULI Center for Capital Markets and Real Estate, predicts a healthy pace of economic expansion. Gross domestic product (GDP) growth for this year is expected to be on par with the 2.4 percent that was recorded in 2014, while strengthening to 2.8 percent in 2016 and 2.7 percent in 2017. It is notable that the forecast growth for 2016 and 2017 is at the highest levels in eight years, comparable with the 2.7 percent GDP growth that occurred in 2006.

Read more...Despite Looming Clouds, Bright Forecast for U.S. Real Estate - Urban Land Magazine

Multifamily Market in U.S. to Remain Strong for Several More Years via WORLD PROPERTY JOURNAL

Based on Freddie Mac's Multifamily Outlook released this week, the U.S. multifamily rental market continues its 5-year streak of robust growth that began just after the Great Recession ended and is expected to remain strong for several more years.

Steve Guggenmos, senior director of Freddie Mac Multifamily investments and research said, "It is now clear that the increase in Multifamily demand is more than a temporary correction stemming from the Great Recession. Favorable demographic trends will support strong multifamily growth for several years. Individual market performance will vary based on the pace of new supply delivered to the market and local economic strength."

Read more...Multifamily Market in U.S. to Remain Strong for Several More Years - WORLD PROPERTY JOURNAL Global News Center

The Nation’s Rent Growth Leaderboard is Heavy on the West via Property Management Insider

Western markets dominate the top spots in the nation’s rent growth leaderboard as of Q3. But that’s not to say performance hasn’t been strong elsewhere, too, with a big numbers coming all across the country.

Watch video...The Nation’s Rent Growth Leaderboard is Heavy on the West | Property Management Insider

Emerging Trends: Dallas/Fort Worth and Austin Are Top Cities for 2016 via Urban Land Magazine

The commercial real estate industry is increasingly focused on the needs of small firms employing fewer than 50 people where job growth is outpacing larger firms by nearly five to one, according to Emerging Trends in Real Estate® 2016, copublished by PwC US and the Urban Land Institute (ULI).

“The real estate industry’s traditional focus on big cities and large employers is shifting significantly as small businesses emerge as the growth engine for the U.S. economy,” said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC. “This is creating disruption in the office sector as it finds ways to create new space models to accommodate these employers.”

Read more...Emerging Trends: Dallas/Fort Worth and Austin Are Top Cities for 2016 - Urban Land Magazine

Renters, get out your checkbooks, hikes are coming via CNBC.com

Property managers in the U.S. are raising rents - possibly by as much as 8 percent next year - as demand rises and vacancies fall, a new survey from property rental website Rent.com found.

"An overwhelming 88 percent of property managers raised their rent in the last 12 months, and there does not appear to be any signs of stopping," the survey of more than 500 U.S. property managers who used Rent.com found.

Read more...Rent.com survey of property managers finds rents rising in 2015, 2016

2015 Poised to Be Busiest Year Ever for Multifamily Sales via Multifamily Executive Magazine

As summer turns to fall, a lot of exhausted multifamily investment and finance professionals around the country are wondering whether the scalding apartment sector is hitting—or at least nearing—its cyclical peak.

And with good reason.

Effective rental rates in many markets have risen to unprecedented levels, gobbling up ever-higher proportions of resident incomes. Accordingly, properties are selling at average per-unit prices beyond previous historic highs amid arguably frenzied trading volume. And, thanks in part to ultra-cheap debt financing, the average capitalization rate recorded in major markets compressed to an all-time low earlier this year—with the yields in secondary and tertiary markets closing in on records as well.

Read more...2015 Poised to Be Busiest Year Ever for Multifamily Sales | Multifamily Executive Magazine | Capital Markets, Cap Rates, Finance, Construction Finance, Effective Rents, Transactions

Have Apartments Reached Tipping Point? via GlobeSt.com

Call it a ripple rather than a storm surge, yet Reis is seeing apartment vacancy tick upward ever so slightly. “It appears as if the market has finally reached its inflection point during the third quarter,” says Ryan Severino, the firm’s senior economist and director of research, who predicts a faster upward pace in the coming months.

Q3 saw nationwide vacancy inch upward by 10 basis points to 4.3%, thanks to construction slightly outpacing net absorption, according to Reis data released Friday. That represented “a slight acceleration of a trend” that began in Q2 2014, although the uptick was followed by a slight decline in vacancy earlier this year.

Read more...Have Apartments Reached Tipping Point? - Daily News Article - GlobeSt.com

D-FW apartment rents soar at record rate in third quarter via Dallas Morning News

Dallas-Fort Worth apartment renters this year are getting slammed with record rent increases.

North Texas apartment costs were up almost 7 percent in the third quarter from a year earlier. That’s about three times the average long-term rent increase rate, according a new report by Carrollton-based MPF Research.

“We can’t find a quarter in the past where rent increases were this high year-over-year,” said Greg Willett, MPF Research chief economist.

Read more...D-FW apartment rents soar at record rate in third quarter | | Dallas Morning News

Matrix Monthly Documents Sizzling September Apartment Rent Growth via Multi-Housing News Online

This year’s trend of ever-increasing U.S. multifamily rents continues unabated. Rents increased by $5 in September to mark a new record high of $1,167, according to the latest edition of Matrix Monthly, a survey of the 108 markets covered by Yardi® Matrix.

September’s year-over-year increase of 6.8 percent was 30 basis points higher than the previous two months and the highest growth in the post-recession cycle. Rents have risen every month in 2015.

Read more...Matrix Monthly Documents Sizzling September Apartment Rent Growth | Multi-Housing News Online

September Rent Increases Marks New Record High via Commercial Property Executive

U.S. multi-family rents continue climbing this year with the September increase of $5 marking a new record of $1,167, according to the September edition of Matrix Monthly, a report on apartment market trends from Yardi Matrix released today.

September’s year-over-year increase of 6.8 percent was 30 basis points higher than the previous two months and the highest growth in the post-recession cycle.

In August, average nationwide rents rose $7 to $1,162, an increase of 6.5 percent year over year, according to Yardi Matrix data. That was the same percentage increase for July, when the average U.S. apartment rent rose to $1,155.

Read more...September Rent Increases Marks New Record High | Commercial Property Executive

August 2015 U.S. Renter Retention, Renewals Rise via Property Management Insider

Last month, MPF research reported renter retention and renewals were on the rise. In fact, retention continues its 20-month run above 50% as renewal rates rise 5.4%. MPF Research provides data and insights into reasons why residents are renewing their leases despite rents increasing:

Read more...August 2015 U.S. Renter Retention, Renewals Rise | Property Management Insider

San Antonio Economic Update September 2015 via Dallas Fed

Economic growth in San Antonio held steady in August. Jobs grew at an annualized 1.5 percent, contrasting with a 0.4 percent contraction in the state. The unemployment rate was unchanged at a low 3.5 percent, and indicators of labor demand suggest a continued tight labor market across many industries in the short term. While weakening growth in Texas due to a renewed fall in oil prices is likely to indirectly dampen growth in San Antonio, the metro area should maintain its growth advantage over the state.

San Antonio Business-Cycle Index growth decelerated slightly to a 5.6 percent annualized rate in August. Moderation in the month’s job growth and the steady unemployment rate contributed to this decline, although index growth remains over 2 percentage points above its long-term average.

Read more...San Antonio Economic Update September 2015 via Dallas Fed

DFW Economic Indicators September 2015 via Dallas Fed

The Dallas–Fort Worth economy expanded modestly in August. Year to date, the metroplex has created jobs at a 2.1 percent pace, outperforming both the state’s 1.1 percent and the nation’s 1.8 percent rate. Home prices rose further in the second quarter, and residential construction remained strong. Unemployment in Dallas held steady but ticked down in Fort Worth in August. Dallas Fed business-cycle indexes point to continued growth for the metroplex.

DFW employment grew an annualized 0.5 percent in August, following a 2.8 percent increase in July. The weakness in August was due to a 5.3 percent (annualized) drop in Fort Worth metro-area employment, while Dallas job gains remained strong at a 3 percent annual rate. Employment losses in Fort Worth have been concentrated in the goods-producing sector, which has been hemorrhaging jobs since the beginning of the year—down 10.2 percent (annualized) through August. Payrolls in the Fort Worth service sector have registered net gains of 1.7 percent (annualized) over the same period. Year to date, Dallas has added 48,700 jobs while Fort Worth has shed 2,300.

Read more...DFW Economic Indicators September 2015 via Dallas Fed

Texas Economic Indicators September 2015 via Dallas Fed

The Texas economy weakened in August. Although unemployment ticked down, employment growth dipped during the month, and exports were flat. Home prices climbed further in the second quarter, and the Texas Leading Index fell in July and August, which resulted in a slight downward revision to the employment forecast.

Texas employment fell an annualized 0.4 percent in August, in contrast with the nation’s 1.5 percent increase. Texas lost 3,600 jobs in August after adding 31,900 in July. Current Texas employment stands at 11.8 million, according to the Current Employment Statistics payroll survey.

Read more...Texas Economic Indicators September 2015 via Dallas Fed

U.S. Multifamily, Commercial Debt Hits $1 Trillion in Q2 via World Property Journal

According to the Mortgage Bankers Association, the level of commercial-multifamily mortgage debt outstanding in the U.S. increased by $38.5 billion in the second quarter of 2015, as three of the four major investor groups increased their holdings. That is a 1.4 percent increase over the first quarter of 2015.

Total commercial-multifamily debt outstanding stood at $2.72 trillion at the end of the second quarter. Multifamily mortgage debt outstanding rose to $1.0 trillion, an increase of $23.6 billion, or 2.4 percent, from the first quarter.

Read more...U.S. Multifamily, Commercial Debt Hits $1 Trillion in Q2 - WORLD PROPERTY JOURNAL Global News Center

Are Low Oil Prices Impacting Apartment Performance in Houston? via Property Management Insider

Not long ago, Houston was everyone’s can’t-miss market. Now, it’s the market everyone is worried about. Has apartment performance started to wane due to low oil prices?

Watch video...Are Low Oil Prices Impacting Apartment Performance in Houston? | Property Management Insider

Rent-Growth and Occupancy Rate Hits Another Record High According to Axiometrics Market Report via MultifamilyBiz.com

The national apartment market's effective rent growth rate of 5.1% in August represented the seventh straight month in which the metric was 5.0% or higher -- the longest such streak since Axiometrics, the leader in apartment and student housing market research, began monthly reporting of annual metrics in April 2009.

August's rate, though an 8-basis-point decrease from July's figure, was 104 basis points (bps) higher than the 4.1% of August 2014.

In only five months between April 2009 and February 2015 had the market achieved 5% annual rent growth, Axiometrics' apartment market research shows.

Read more...Rent-Growth and Occupancy Rate Hits Another Record High According to Axiometrics Market Report | MultifamilyBiz.com

In Some Cities, Even Landlords Think Rents Are Getting Out of Hand via Bloomberg Business

It’s tough to be a renter. Housing costs, in many markets, are rising faster than wages, and there is good reason to think that trend will continue for years to come.

For renters in Austin, Boston, San Francisco, and Houston, however, there may be a slightly less depressing future, a new report shows. Periodically, commercial real estate firm CBRE polls brokers on the rent-growth expectations that apartment landlords are baking into property transactions. And for prime properties in those four cities, those expectations are coming down, according to its most recent report.

Read more...In Some Cities, Even Landlords Think Rents Are Getting Out of Hand - Bloomberg Business

Occupancy Hits Record Levels in August via Multifamily Executive Magazine

The dog days of summer seem to have brought more of the same for the rental industry as occupancy hit another high, according to the latest analysis from Dallas-based research firm Axiometrics.

August tallied an effective rent growth rate of 5.1%, which was the seventh straight month that rent increases came in above 5%. That growth rate was an eight basis-point decline from July, but well above the August 2014 mark of 4.1%.

Read more...Occupancy Hits Record Levels in August | Multifamily Executive Magazine | Rents, Rent Trends, Occupancy and Vacancy Rate, Effective Rents, Cristina Sullivan, Axiometrics, Gables Residential

Texas reports its second monthly job loss of 2015 via Dallas Business Journal

Texas, often seen as an economic bellwether for the United States, shed jobs for the second time this year, the Texas Workforce Commission reported Friday.

After four consecutive months of monthly job increases, the state lost 13,700 positions in August, the TWC said. The contraction comes after four straight months of employment increases, including a revised gain of 25,800 jobs in July.

Read more...Texas reports its second monthly job loss of 2015 - Dallas Business Journal

ALN Monthly Newsletter September 2015 via ALN Apartment Data

ALN Data just released their August 2015 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter September 2015 via ALN Apartment Data

More Apt. Tenants Opt to Renew via GlobeSt.com

Even as apartment rents continue to climb, so do owners’ retention rates. MPF Research said 51.1% of renters whose leases were set to expire last month chose to renew rather than move out, a 300-basis point increase from August 2014. Those renewals included an average 5.4% increase in monthly rent, according to Carrollton, TX-based MPF, based on an analysis of data from parent company RealPage Inc.

The August rent increase was the largest for renewals in nearly 10 years, MPF says. More than 50% of apartment tenants have chosen to renew over the past 20 months. Prior to 2010, the renewal rate tended to fall within the mid-40% range.

Read more...More Apt. Tenants Opt to Renew - Daily News Article - GlobeSt.com

Houston Economic Indicators September 2015 via Dallas Fed

The Houston Business-Cycle Index accelerated to a growth rate of 5.9 percent in July from a June growth rate of 2.7 percent due to very strong job growth. Goods-producing sectors continued to underperform relative to private services. The two have largely offset each other year to date. Leading indicators are pointing toward a moderating of losses in industries tied to the oilfield and sustained growth elsewhere. On balance, the outlook for growth in Houston remains weak and uncertain.

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

Sizzle Factor: Apartment Developers Try to 'Out-Amenity' Rivals In Crowded Markets via CoStar Group

Apartment builders have long targeted renters with the latest amenities and fancy luxury features like gyms, business centers, and concierge and dry cleaning service.

But rooftop dog parks?

With tens of thousands of new units coming on line each month across the country in New York City, Washington, D.C., Seattle, Los Angeles, Atlanta, Dallas and other large markets across the country, developers are venturing further onto the risk curve, bringing luxury offerings and amenities to a wider range of neighborhoods and locations. They're also amping up the amenities with creative and sometimes offbeat features and marketing events to build buzz and push pre-leasing.


Read more...Sizzle Factor: Apartment Developers Try to 'Out-Amenity' Rivals In Crowded Markets - CoStar Group

Despite Investor Concerns of Overheating, Market Indicators Support CRE Pricing via CoStar Group

As commercial real estate prices have continued to surge, some have become concerned that valuations may be overheating or even reaching bubble levels as a combination of high demand, low interest rates and loosening loan underwriting standards contribute to a record spike in deal activity and price paid per square foot for trophy properties in top U.S. and global markets.

But while investors and analysts agree the surging demand for commercial property should be closely scrutinized for signs of overheating, several market indicators appear to reflect solid justification for the upswing in prices. So while peaking prices are a concern, analysts said it is premature to characterize the recent valuation increases as a 'bubble' that will inevitably lead to a market correction.

Read more...Despite Investor Concerns of Overheating, Market Indicators Support CRE Pricing - CoStar Group

Multifamily Investment in U.S. Hits Record High Over Last Year via World Property Journal

According to research from CBRE, investment in U.S. multifamily reached $127 billion for the year ending Q2 2015 - the highest four-quarter total in history and growth of 36% over the 12-month period. The total surpasses the mid-2000s peak of $100 billion achieved in the year ending Q2 2006.

Investment in multifamily communities has been robust for several years and this trend continued during Q2 2015, with $30 billion flowing into the sector. The quarter's total reflects a 35% gain over Q2 2014, although a slight decline from Q1 2015 (-3%). Multifamily acquisitions represented 27% of the total $110 billion invested in U.S. commercial real estate in Q2 2015.

Read more...Multifamily Investment in U.S. Hits Record High Over Last Year - WORLD PROPERTY JOURNAL Global News Center

Housing Demand Expected to Surge Over Next 10 Years According to MBA Report via CoStar Group

In what it projects would be one of the strongest housing markets in U.S. history, the Mortgage Bankers Association (MBA) expects between 13.9 million and 15.9 million of additional households will be formed by 2024.

The MBA report, titled "Housing Demand: Demographics and the Numbers Behind the Coming Multi-Million Increase in Households," finds that surge in household formation, and expected related housing demand, will be driven largely by hispanics, baby boomers and millennials.

"Household formation has been depressed in recent years by a long, jobless recovery and by a lull in the growth of the working age population," said Lynn Fisher, MBA's vice president of research and economics. "(However,) improving employment markets will build on major demographic trends - including maturing of Baby Boomers, Hispanics and Millennials - to create strong growth in both owner and rental housing markets over the next decade."

Read more...Housing Demand Expected to Surge Over Next 10 Years According to MBA Report - CoStar Group

Apartment Rents Grow Faster than Incomes via National Real Estate Investor

The average employee isn’t getting a big raise this year—but apartment rents are growing more quickly than ever.

“Across most markets, renters are paying a higher percentage of their incomes in rent,” says Luis Mejia, director of U.S. multifamily research with the portfolio strategy division of research firm CoStar.

That’s not stopping apartment rents from going up. That’s partly because the average income is surprisingly high for households living in rental housing with unrestricted rents. These households can, on average, afford to pay and they don’t have that many attractive alternatives.

Read more...Apartment Rents Grow Faster than Incomes | Multifamily content from National Real Estate Investor

Houston apartment permits second to one in U.S.via Real Estate Center at Texas A&M

Houston retained its No. 2 ranking on a monthly list of major metros across the country with the highest number of apartment units permitted.

New York ranked No. 1 while Dallas, Los Angeles and Seattle rounded out the top five.

Builders had 26,486 units permitted over the 12 months ending in July, 29 percent higher than a year earlier and 3 percent higher than in June.

Read more...Houston apartment permits second to one in U.S.via Real Estate Center at Texas A&M

MF Will See ‘Above-Trend’ Demand via GlobeSt.com

For those wondering whether multifamily’s growth will be sustainable, Yardi Matrix sees plenty of reason for bullishness. The sector is being buoyed by a series of tailwinds, including report an improving national economy, above-trend household formations by the Millennial generation and the movement of Baby Boomers into urban apartments.

“Our forecast at the beginning of the year for solid 5% rent growth seems almost too conservative now, as rents have grown by 6.2% over the first half with no slowdown in sight,” according to Yardi Matrix researchers who prepared the summer 2015 edition of the Matrix National Outlook, an analysis of market conditions. “In our view, demand for apartments will continue to be above-trend for at least the next couple of years.”

Read more...MF Will See ‘Above-Trend’ Demand - Daily News Article - GlobeSt.com

Austin Economic Indicators September 2015 via Dallas Fed

The Austin economy continued to expand rapidly in July. The metro business-cycle index grew at a brisk pace, while job growth picked up after decelerating markedly in June. The unemployment rate ticked up slightly but remains indicative of a very tight labor market. With annualized job growth of 4.5 percent so far this year—more than triple the state rate—the overall Austin economy shows few signs of slowing even as labor constraints and the strong value of the dollar weigh down certain

The business-cycle index grew at a 9.8 percent annualized rate in July after reaching a postrecession peak of 10.2 percent in May. Growth so far this year has averaged 10 percent, outperforming 2014 growth by 0.6 percentage points. A small exposure to the oil and gas sector and a bright outlook for sectors such as high-tech, health care and tourism suggest continued strength in the Austin economy in the second half of the year.

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

Dallas Beige Book - 9/2/2015 via Dallas Fed

The Eleventh District economy grew at a modest pace over the past six weeks. Manufacturing demand was mixed. Retail sales were weak, with the exception of strong auto sales. Demand for nonfinancial services held steady or improved, except for railroads which saw decreased cargo volumes. Real estate activity remained solid overall, and loan demand rose slightly. Demand for oil field services remained depressed, and lower oil prices dampened outlooks. Price pressures remained subdued and employment held steady or increased. Outlooks were mostly positive, except in the energy sector.

Read more...Dallas Beige Book - Dallas Fed

DFW Economic Indicators August 2015 via Dallas Fed

The Dallas–Fort Worth economy expanded strongly in July. Year to date, the metroplex has created jobs at a 2.4 percent annualized pace, outperforming both the state’s 1.3 percent and the nation’s 1.8 percent rate. Home sales rose at a solid pace in July, and demand for office space remained strong in the second quarter. Unemployment in Dallas and Fort Worth held steady in July. Dallas Fed business-cycle indexes point to continued growth for the metroplex.

DFW employment grew at a rapid clip of 3.7 percent in July, following a 5.6 percent increase in June. DFW employment growth has moderated to a 2.4 percent annualized rate year to date, slower than the brisk 4.1 percent pace seen last year. Currently, area employment stands at 3.39 million, according to the Bureau of Labor Statistics’ payroll survey. Through July, Dallas added 44,000 jobs and Fort Worth gained 3,300.

Read more...DFW Economic Indicators August 2015 via Dallas Fed

Go Green: Rebates Available For Energy and Water-Saving Projects via Property Management Insider

Money that’s available to offset costs of energy-saving upgrades for apartments is getting more plentiful, plus it’s easier to find.

Utility companies and municipalities in many states offer rebates, incentives and demand-response programs to the tune of billions each year to encourage federal facilities and consumers to cut energy use and demand.

Incentives range from free energy audits to discounts or money back on energy-efficient equipment like HVAC systems, toilets and light bulbs. Participating in offering programs is a win-win for users. Often the cost of supplies or fixtures is heavily discounted or even free, plus users enjoy lower utility bills.

Read more...Go Green: Rebates Available For Energy and Water-Saving Projects | Property Management Insider

Rental Rate Overtakes Location as Top Renewal Decision Factor According to Latest Kingsley Report via MultifamilyBiz.com

Kingsley Associates' latest analysis reveals that renter renewal intent and value for amount paid have continued to decline since Q4 2013. Only 52.3 percent of residents responded that they "probably would" or "definitely would" renew their lease, down 0.9 percent from one year ago. Similarly, only 53.9 percent of renters feel their apartments are worthy of their current rental rate, down 0.6 percent over the same period.

According to John Falco, a principal in Kingsley Associates' Atlanta office, “When we look at time trend analysis, it is quite evident that renters are feeling the effects of sharp rent increases. Three years ago, only one out of every three renters cited rental rate as a top decision factor.

Read more...Rental Rate Overtakes Location as Top Renewal Decision Factor According to Latest Kingsley Report | MultifamilyBiz.com

Matrix Monthly Reports Steady Rent Growth, Solid Fundamentals via Multi-Housing News Online

U.S. apartment rent growth remained strong in August 2015, according to the latest edition of Matrix Monthly, a report on U.S. multifamily market trends from Yardi®. Nationwide, rents rose by $7 to a record high of $1,162, matching the 6.5 percent year-over-year increase in July.

Read more...Matrix Monthly Reports Steady Rent Growth, Solid Fundamentals | Multi-Housing News Online

Apartment Markets Survive New Construction, So Far via National Real Estate Investor

The cities where developers are opening the most new apartments are handling the new supply pretty well, at least for now.

“Looking at rent growth performances, there’s really only one spot [major metro apartment market] that is having trouble digesting new supply,” says Greg Willett, chief economist for RealPage Inc. “That’s Houston.”

But developers aren’t finished. Even as they race through an incredibly busy year for new construction, apartment developers are now planning even more new projects.

Read more...Apartment Markets Survive New Construction, So Far | Multifamily content from National Real Estate Investor

Texas Added 35,800 Jobs in July; State Employment Forecast Rises to 1.3 Percent via Dallas Fed

Texas added 35,800 jobs in July, according to seasonally adjusted and benchmarked payroll employment numbers released today by the Federal Reserve Bank of Dallas. This was the largest monthly gain so far this year.

The state added a revised 10,300 jobs in June. Through July, jobs have grown at an annualized pace of 1.3 percent after growing 3.6 percent in 2014.

Read more...Dallas Fed: Texas Added 35,800 Jobs in July; State Employment Forecast Rises to 1.3 Percent - Dallas Fed

Top Cities for Multifamily Rentals via Commercial Property Executive

The demand for rental housing is increasing nationwide, with more and more people turning to renting in America’s largest cities. A combination of factors – including limited inventory levels, declining vacancy rates and continued job growth – have pushed rental prices up by 6.5 percent over the past year, to reach a record high of $1,155 in July 2015.

The number of renter households has also seen a robust increase across the country, with Philadelphia recording the largest renter population growth between 2006 and 2013, a whopping 28.2 percent. In fact, the renter population increased by double-digit percentages in nine of the country’s largest metros, according to a recent study by NYU Furman Center and Capital One. The study examined the housing landscape and market trends in the central cities of the 11 biggest U.S. metropolitan areas (by population) – namely, Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York City, Philadelphia, San Francisco and Washington, D.C.

Read more...Top Cities for Multifamily Rentals | Commercial Property Executive

Multifamily Sales Prices to Continue Rising? via GlobeSt.com

“The market will continue to grow, pending the tide of interest rates. Due to stronger financial safeguards in place from the federal government and lenders, interest rates may remain low for a longer period of time.” That is according to Janet Neman, senior managing director of Charles Dunn Co. in the Century City, CA office.

With this in mind, she says, as well as the compressed supply in developed metropolitan areas, “we can expect sale prices to keep rising for the foreseeable future.”

We chatted with Neman and other key industry sources on what is in store for multifamily’s future as part of GlobeSt.com’s 15th anniversary celebration.

Read more...Multifamily Sales Prices to Continue Rising? - Daily News Article - GlobeSt.com

Texas adds 31,400 jobs in July; Dallas-Fort Worth's jobless rate up slightly from June via Dallas Business Journal

For the fourth straight month, Texas added jobs in July, recording 31,400 new seasonally adjusted nonagricultural jobs, the Texas Workforce Commission reported on Friday.

The Dallas-Fort Worth-Arlington metro area saw an employment rate in July of 4.1 percent, down from 5.4 percent in July 2014. The July rate rose slightly from June’s 4.0 percent.

The DFW rate is slightly better than the state as a whole, which had a 4.2 percent rate in July. The state has been at 4.2 percent for four of the first seven months of the year, the TWC said.

Read more...Texas adds 31,400 jobs in July; Dallas-Fort Worth's jobless rate up slightly from June - Dallas Business Journal

Rent rising but still reasonable via Dallas Morning News

Slide into any of the watering holes in Dallas’ hot Uptown neighborhood and you can expect to hear some whining at just the mention of rising apartment rents.

Dallas-area apartment rents are at an all-time high — up more than 5 percent in the last year.

A new place to rent in Uptown will set you back more than $1,800 a month on average.

But the Dallas-Fort Worth area still lags other big-city markets in how much folks are paying to rent the roof over their heads.

Read more...Even with recent increases, Dallas’ apartment rents are middle-of-the-road compared with other big markets | Dallas Morning News

More millennials stuck renting for years before buying home via US News

Home ownership, that celebrated hallmark of the American dream, is increasingly on hold for younger Americans.

Short of cash, burdened by student debt and unsettled in their careers, young adults are biding time in apartments for longer periods and buying their first homes later in life.

The typical first-timer now rents for six years before buying, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33 — in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

Read more...More millennials stuck renting for years before buying home - US News

Where apartment construction is hottest via CNBC

Single-family home construction made a strong move higher in July, but it was not enough to reverse a new dynamic in today's housing market; multifamily construction and demand are leading the recovery. After a decade of underbuilding apartments, cranes are scattering city skylines, and the numbers are truly staggering.

Multifamily construction activity is above historical averages in more than one-quarter of the nation's largest metropolitan housing markets, according to a new report from Trulia, a real estate listing and analytics company. In New York, activity is four times the normal average, in Boston, triple the average, and in Newark, New Jersey, double the average. This, as single-family home construction is running at half its normal pace.

Read more...Where apartment construction is hottest via CNBC

Multifamily Residents Expect More via GlobeSt.com

“In the past, the relationship between property ownership and residents was more one-dimensional; you leased a unit and your work was done.” That is according to Darcy Miramontes, EVP of JLL capital markets, multifamily.Nowadays, she says, residents expect more in terms of the services and the lifestyle that a community offers.

“Square footage is not as important as amenities, allowing projects with an appealing lifestyle to charge more for smaller units,” notes Miramontes. “Residents today are looking for amenities like pet services (including shared community pets), package delivery rooms, community and collaborative spaces, bike rental and repair shops, rooftop decks, smaller and smarter appliances, and an emphasis on storage space.”

Read more...Multifamily Residents Expect More - Daily News Article - GlobeSt.com

Why Americans wait longer than ever to buy first homes via CNBC

Short of cash and unsettled in their careers, young Americans are waiting longer than ever to buy their first homes.

The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33—in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

Read more...Why Americans wait longer than ever to buy first homes

Rents Rise Faster for Midtier Apartments Than Luxury Ones via WSJ

The Verona apartment complex in suburban Denver doesn’t have the flashy amenities some tenants covet. No infinity pool. No rooftop lounge. No concierge service. Still, demand at the 1980s-era complex is so strong that the landlord has raised the rent 72% on some apartments in just two years, after renovations.

Modest apartment buildings like the Verona that cater to middle-class and working-class families are becoming scarcer as fewer are built nationwide and older ones are demolished. That has resulted in a severe shortage of midtier apartments, causing rents for these units to rise at a faster pace than for luxury ones.

Read more...Rents Rise Faster for Midtier Apartments Than Luxury Ones - WSJ

Hidden Gems Await in Distressed Property Market for Multifamily Sector via Property Management Insider

Amid the new, glass high-rises and trendy podiums going up in the urban core and beyond are still some hidden gems. Bank distressed homes or apartments that need repairs await the right kind of owner who can add polish and create a comfortable, safe residential experience.

The playing field for distressed property landlords doesn’t include new construction or spruce-ups of recently built properties. Instead, communities that bear the long-term effects of poor maintenance and management practices or those that are ridden with crime can be good investment opportunities. It’s not uncommon for some to be heavily discounted and sell for far less than current value.

Read more...Hidden Gems Await in Distressed Property Market for Multifamily Sector | Property Management Insider

CMBS Maturities Face Refi Hurdles via GlobeSt.com

As one measure of the volume of CMBS due to mature between now and 2017, consider that Fitch Ratings says about one-third, or 35%, of its rated universe is coming due over the next three years. The ratings agency anticipates that many of the peak-vintage loans face the prospect of being unable able to refinance at their respective maturity dates without additional capital. Furthermore, “potential higher interest rates later this year may put additional stress on their ability to refinance,” according to a Fitch report.

With approximately $20 billion of Fitch-rated loans with scheduled maturities already paid up through July of this year, the balance of 2015 will see another $10.8 billion in maturities across 1,215 loans. In addition, approximately $1.3 billion of loans due this year and $6 billion of loans scheduled to mature next year have defaulted.

Read more...CMBS Maturities Face Refi Hurdles - Daily News Article - GlobeSt.com

Houston Economic Indicators August 2015 via Dallas Fed

The Houston Business-Cycle Index was essentially unchanged from May to June, contracting an annualized 0.1 percent. Exports and housing activity proved resilient in recent months even as oil and gas industries suppressed the region’s outlook. Job losses in construction and other goods-producing industries have continued to mount since April, while overall employment managed to increase. On the whole, indicators for the region point to further weakness in employment and output.

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

Multifamily Demand Continues to Rise, But How Will We Keep Up? via National Real Estate Investor

With homeownership levels at their lowest point in 50 years, the demand for multifamily rental homes is booming. Recently, the Urban Institute released a study that suggests 59 percent of new household formation over the next 15 years will be renters, which will cause an even bigger surge in the demand for rental housing. But are we prepared to meet this increased need?

To meet the growing demand for rental housing, we must address both the availability and affordability of supply. While the pace of new construction has picked up in recent years, it’s not yet at a level to meet new household demand. Also, it’s important to consider the simultaneous loss of inventory occurring.

Read more...Multifamily Demand Continues to Rise, But How Will We Keep Up? | Multifamily content from National Real Estate Investor

Oil Prices Make a Difference in Performance of Texas Apartments via Axiometrics

Texas has consistently been ahead of the curve when it comes to the ability to maintain steady employment. The only time in the last 40 years when Texas’ economy declined faster than the nation’s was during the mid-'80s, when the oil market fell flatter than it has ever been since.

Currently, as oil prices have plummeted from $102.59 a barrel in March 2014 to $45.36 in August 2015, the market for Texas apartments in certain areas throughout the state have been hit hard, even though the state’s job market continues to grow, according to Axiometrics’ apartment market research.

Read more...Oil Prices Make a Difference in Performance of Texas Apartments

ALN Monthly Newsletter August 2015 via ALN Apartment Data

ALN Data just released their July 2015 stats on occupancy and rents for 23 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene and Corpus Christi. It is a must read from a great provider of apartment data.

Read more...ALN Monthly Newsletter August 2015 via ALN Apartment Data

Austin Economic Indicators August 2015 via Dallas Fed

The Austin economy maintained a steady pace of growth in June. Job growth moderated to an annualized 2.4 percent rate but remained above the state’s 1.8 percent. The unemployment rate declined for the third month in a row, to 3.1 percent. In the first half of the year, Austin job growth accelerated to 4.5 percent even as growth in the rest of the state fell below the national average. While goods-producing industries continue to face headwinds, service sector jobs appear poised to grow strongly in the second half of the year.

The Austin Business-Cycle Index accelerated again, and growth for the first half of the year came in at an annualized 9.9 percent. Employment growth of 4.5 percent over the past six months, coupled with a fall in the unemployment rate from 3.6 percent in December 2014 to 3.1 percent in June 2015, has propelled recent growth in the index.

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

Downtown Austin: flood of multifamily units in forecast via Real Estate Center at Texas A&M

The latest apartment survey published by Austin Investors Interests LLC indicates vacancies are growing substantially in that particular market segment.

New deliveries have pushed occupancy to 82 percent in the urban core, compared to 90 percent last quarter.

Consider this — in the past 12 months about 2,341 luxury units have delivered in a four-mile radius of downtown and more than double that are under construction in the same area.

Read more...Downtown Austin: flood of multifamily units in forecast via Real Estate Center at Texas A&M

Apartment Demand Stays Hot, but Lending Tightens via CoStar Group

Consumer demand for rental apartments remained strong while the market for apartment properties stayed relatively unchanged in the latest National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions.

The market tightness, sales volume and equity finance indexes all remained near or above the break-even level of 50, according to NMHC. However, its debt financing index declined significantly to 35 from 60. The index fell below 50 for the first time since January 2014.

"The decline in the debt financing index is significant," said Mark Obrinsky, NMHC’s senior vice president of research and chief economist.

Read more...Apartment Demand Stays Hot, but Lending Tightens - CoStar Group

The new millennial mystery: why young people with jobs are still living at home via The Washington Post

Several years ago, when the economy was still looking grisly, it was easy to explain the single most popular trope about millennials — that an unusually high number of them were still living in their parents' basements. Obviously, they didn't have jobs. Where were they supposed to go?

"The standard explanation was, 'it’s a crummy job market,'" says Richard Fry, a senior researcher at the Pew Research Center. He reasoned, as just about everyone did, that as the job market improved, Millennials would move out. A new Pew analysis this week muddles that picture: The unemployment rate has fallen significantly since the recession for 18-to-34-year-olds. But the number of them heading their own households has not budged at all.

Read more...The new millennial mystery: why young people with jobs are still living at home - The Washington Post

No Slowdown in Apt. Rent Gains via GlobeSt.com

Giving further credence to the argument that the multifamily cycle still has plenty of runway, Yardi said Thursday that apartment rents nationwide rose 6.5% year-over-year in July to a record $1,155. “Growth is not showing signs of moderating,” according to Yardi’s Matrix Monthly report, based on a survey of owners in the 101 markets covered by the Yardi Matrix business unit. July’s average rent was 20 basis points higher than June’s, marking the fastest growth of the current cycle.

Read more...No Slowdown in Apt. Rent Gains - Daily News Article - GlobeSt.com