The Texas economy continues to create more jobs despite lower oil prices. The state’s economy gained 304,200 nonagricultural jobs from April 2014 to April 2015, an annual growth rate of 2.6 percent compared with 2.2 percent for the United States.
According to the Real Estate Center’s latest Monthly Review of the Texas Economy, the state’s nongovernment sector added 282,200 jobs, an annual growth rate of 2.9 percent compared with 2.6 percent for the nation’s private sector.
Read more...Falling Oil Prices Not Stopping Texas Job Growth via Real Estate Center at Texas A&M
Friday, May 29, 2015
Between Generations, Housing Preferences Have Evolved via Property Management Insider
Over the previous few blog posts, the economic factors that are likely causing Generation Y’s lowered propensity to purchase homes was discussed. Declining incomes, higher costs of living, the unavailability of affordable homes and tighter mortgage qualifications all present significant obstacles to young adults’ ability to buy a home. Those were contrary to the majority of media reports which consistently attribute Millennials’ lack of home buying solely to preference, a gross over simplification of the current situation. Generational differences do have an effect, but it’s a much smaller effect than what has been common in public discourse.
The desire to own a house is another component of the declining trend in home purchase. Even if Millennials were in an identical situation financially as Generation X was a little over 10 years ago, and the housing and lending markets were on par, would they even want to purchase a home? Many Millennials might say homeownership doesn’t fit their culture and lifestyle.
Read more...Between Generations, Housing Preferences Have Evolved | Property Management Insider
The desire to own a house is another component of the declining trend in home purchase. Even if Millennials were in an identical situation financially as Generation X was a little over 10 years ago, and the housing and lending markets were on par, would they even want to purchase a home? Many Millennials might say homeownership doesn’t fit their culture and lifestyle.
Read more...Between Generations, Housing Preferences Have Evolved | Property Management Insider
San Antonio Economic Update May 2015 via Dallas Fed
The San Antonio economy decelerated in April. Jobs contracted at a 0.5 percent annualized rate, in contrast with 1 percent growth in Texas overall. However, job growth so far this year remains substantially stronger than in the state. The San Antonio unemployment rate was flat in April. Housing indicators continue to suggest a healthy market for building activity. Over the past year, biotech and life sciences have been sources of strength in the San Antonio economy.
Growth in the San Antonio Business-Cycle Index decelerated slightly to an annualized 7.2 percent over the six months through April. While activity in recent months has been mixed, job growth over this period has averaged a robust 3 percent. At the same time, the unemployment rate has fallen 0.6 percentage points to its lowest level in over a decade.
Read more...San Antonio Economic Update May 2015 via Dallas Fed
Growth in the San Antonio Business-Cycle Index decelerated slightly to an annualized 7.2 percent over the six months through April. While activity in recent months has been mixed, job growth over this period has averaged a robust 3 percent. At the same time, the unemployment rate has fallen 0.6 percentage points to its lowest level in over a decade.
Read more...San Antonio Economic Update May 2015 via Dallas Fed
Texas Economic Indicators May 2015 via Dallas Fed
The Texas economy expanded at a modest pace in April. Employment growth was positive during the month, and unemployment held steady. Exports dipped during the first quarter. The Texas Leading Index ticked down in March for the seventh consecutive time.
Texas employment edged up at a 1.0 percent annualized pace in April, slower than the nation’s 1.9 percent increase. Texas gained 9,700 jobs in April after shedding 11,800 jobs in March. Current Texas employment stands at 11.78 million, according to the payroll survey (CES).
Read more...Texas Economic Indicators May 2015 via Dallas Fed
Texas employment edged up at a 1.0 percent annualized pace in April, slower than the nation’s 1.9 percent increase. Texas gained 9,700 jobs in April after shedding 11,800 jobs in March. Current Texas employment stands at 11.78 million, according to the payroll survey (CES).
Read more...Texas Economic Indicators May 2015 via Dallas Fed
Thursday, May 28, 2015
DFW Economic Indicators May 2015 via Dallas Fed
The Dallas–Fort Worth economy expanded in April following a dip in March. Year to date, DFW employment grew 2.2 percent, outperforming both the state’s 0.8 percent and the nation’s 1.7 percent rate. Home price appreciation continued at a solid pace, and demand for office space remained strong. Unemployment in Dallas and Fort Worth fell in April. Dallas Fed business-cycle indexes point to continued growth for the metroplex.
DFW employment grew at a rapid clip of 4.8 percent in April following a decline of 1.6 percent in March. Over the past 12 months, the metroplex has created jobs at a 3.6 percent pace, second only to Austin, which grew 3.7 percent.
Read more...DFW Economic Indicators May 2015 via Dallas Fed
DFW employment grew at a rapid clip of 4.8 percent in April following a decline of 1.6 percent in March. Over the past 12 months, the metroplex has created jobs at a 3.6 percent pace, second only to Austin, which grew 3.7 percent.
Read more...DFW Economic Indicators May 2015 via Dallas Fed
Market Forecasts via Axiometrics
Western and southern apartment markets will likely experience the highest rental revenue and job growth the next five years, according to Axiometrics’ apartment forecasts.
The scatterplot chart below illustrates long-term cumulative rental revenue and job growth forecasts for 2015-2020 for 54 of the markets that Axiometrics tracks. The crosshairs represent the national averages. Rental revenue growth is calculated by adding effective rent growth and change in occupancy. As job growth is the primary driver of effective rent growth, one would expect a strong correlation between the two.
Read more...Market Forecasts via Axiometrics
The scatterplot chart below illustrates long-term cumulative rental revenue and job growth forecasts for 2015-2020 for 54 of the markets that Axiometrics tracks. The crosshairs represent the national averages. Rental revenue growth is calculated by adding effective rent growth and change in occupancy. As job growth is the primary driver of effective rent growth, one would expect a strong correlation between the two.
Read more...Market Forecasts via Axiometrics
Qualified Millennials Find Affordable Homes in Short Supply via Property Management Insider
A previous post, “Millennials Face Unprecedented Economic Hurdles to Home Ownership,” outlined some of the most pertinent economic constraints facing the Millennial generation with regards to home purchase. Declining incomes, higher costs of living and an increasing cost of homes present significant obstacles to young adults’ ability to buy a home. Another obstacle for would-be buyers is a shortage of available, lower-cost houses.
Currently there is mismatch of available product and lower-cost product that most Millennial households could afford. Housing inventory has remained depressed even as prices have risen in recent years, and inventory is in shortest supply in the most affordable segments. The divergence in home prices and inventory is a perplexing trend, as prices have been the most robust predictor of housing inventory throughout history.
Read more...Qualified Millennials Find Affordable Homes in Short Supply | Property Management Insider
Currently there is mismatch of available product and lower-cost product that most Millennial households could afford. Housing inventory has remained depressed even as prices have risen in recent years, and inventory is in shortest supply in the most affordable segments. The divergence in home prices and inventory is a perplexing trend, as prices have been the most robust predictor of housing inventory throughout history.
Read more...Qualified Millennials Find Affordable Homes in Short Supply | Property Management Insider
Wednesday, May 27, 2015
Multifamily Developers Favor Downtown, But Suburbia Holds Its Own via National Real Estate Investor
In the midst of the Great Recession, vacancy in the multifamily sector hit a cyclical high of 8.0 percent. Over the next several years, the vacancy rate nearly halved, reaching 4.1 percent in early 2014. Vacancy now stands at 4.2 percent as of the end of the first quarter, where it has plateaued for 12 straight months.
What these figures don’t reveal is whether a disparity exists between the urban and suburban market segments. So we aim to dissect these headline figures in order to answer some very specific questions, in particular, how has the recovery affected multifamily properties in suburban areas versus those found in urban neighborhoods? Have both subsets of properties shared equally in the recovery and subsequent expansion? And perhaps most importantly, how will the influx of new supply influence market fundamentals in each category?
Read more...Multifamily Developers Favor Downtown, But Suburbia Holds Its Own | Commentary content from National Real Estate Investor
What these figures don’t reveal is whether a disparity exists between the urban and suburban market segments. So we aim to dissect these headline figures in order to answer some very specific questions, in particular, how has the recovery affected multifamily properties in suburban areas versus those found in urban neighborhoods? Have both subsets of properties shared equally in the recovery and subsequent expansion? And perhaps most importantly, how will the influx of new supply influence market fundamentals in each category?
Read more...Multifamily Developers Favor Downtown, But Suburbia Holds Its Own | Commentary content from National Real Estate Investor
Property Owners Reporting Strong 2014 NOI Gains via CoStar Group
Commercial real estate owners posted strong net operating income (NOI) growth last year. For the properties reporting year-end 2014 financials, NOI grew by 2.8% on average, compared to growth of 2.64% in 2013, according to Wells Fargo Securities.
Wells Fargo based its analysis on NOIs reported by properties backing collateralizing loans in conduit CMBS transactions. More than half of those properties have now reported full-year 2014 financials.
If the growth rate holds among the remaining properties yet to report, it would mark the second highest level of NOI growth since the financial crisis, only falling short of the 3.43% NOI increase seen in 2012.
Read more...Property Owners Reporting Strong 2014 NOI Gains - CoStar Group
Wells Fargo based its analysis on NOIs reported by properties backing collateralizing loans in conduit CMBS transactions. More than half of those properties have now reported full-year 2014 financials.
If the growth rate holds among the remaining properties yet to report, it would mark the second highest level of NOI growth since the financial crisis, only falling short of the 3.43% NOI increase seen in 2012.
Read more...Property Owners Reporting Strong 2014 NOI Gains - CoStar Group
Texas Manufacturing Outlook Survey May 26, 2015 via Dallas Fed
Texas factory activity declined again in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell to -13.5, its lowest reading in six years.
Other measures of current manufacturing activity reflected continued contraction in May. The new orders index held steady at -14.1, and the growth rate of orders index held steady at -15.2, marking the fifth and seventh negative reading in a row for these indexes. The capacity utilization index edged down to -11.6. The shipments index fell nearly 8 points to -13.2, with more than 30 percent of firms noting lower shipment volumes in May than in April.
Read more...Texas Manufacturing Outlook Survey - Dallas Fed
Other measures of current manufacturing activity reflected continued contraction in May. The new orders index held steady at -14.1, and the growth rate of orders index held steady at -15.2, marking the fifth and seventh negative reading in a row for these indexes. The capacity utilization index edged down to -11.6. The shipments index fell nearly 8 points to -13.2, with more than 30 percent of firms noting lower shipment volumes in May than in April.
Read more...Texas Manufacturing Outlook Survey - Dallas Fed
Millennials Face Unprecedented Economic Hurdles to Home Ownership via Property Management Insider
A previous post, “For Millennials, Low Ownership Rates Weigh on Household Formation,” showed a lack of participation in the housing market among young adults in the Millennial generation. As a percentage of the population, Generation Y isn’t renting more than young adults in the previous generation. Instead, they are buying fewer homes. The reason for the drop-off in home buying rates is due to a mix of factors. This post explores some of the economic reasons.
The recent proposal of regulatory changes aimed at unlocking tight credit has led some to wonder if the result will unleash a flood of Millennial homebuyers. However, there are some significant economic headwinds that will likely persist in preventing those of Gen Y from purchasing a home.
In this post-recession world, qualifying for a home loan is more difficult.
Read more...Millennials Face Unprecedented Economic Hurdles to Home Ownership | Property Management Insider
The recent proposal of regulatory changes aimed at unlocking tight credit has led some to wonder if the result will unleash a flood of Millennial homebuyers. However, there are some significant economic headwinds that will likely persist in preventing those of Gen Y from purchasing a home.
In this post-recession world, qualifying for a home loan is more difficult.
Read more...Millennials Face Unprecedented Economic Hurdles to Home Ownership | Property Management Insider
Dallas Fed: Texas Adds 9,600 Jobs in April; Unemployment Rates Fall In Five Major Metro Areas via Dallas Fed
Texas added 9,600 jobs in April, according to seasonally adjusted and benchmarked payroll employment numbers released today by the Federal Reserve Bank of Dallas.
The state lost a revised 11,800 jobs in March. Through the first four months of 2015, jobs have grown at an annualized pace of 0.8 percent after growing 3.6 percent in 2014.
Read more...Dallas Fed: Texas Adds 9,600 Jobs in April; Unemployment Rates Fall In Five Major Metro Areas - Dallas Fed
The state lost a revised 11,800 jobs in March. Through the first four months of 2015, jobs have grown at an annualized pace of 0.8 percent after growing 3.6 percent in 2014.
Read more...Dallas Fed: Texas Adds 9,600 Jobs in April; Unemployment Rates Fall In Five Major Metro Areas - Dallas Fed
Tuesday, May 26, 2015
New Luxury Rental Projects Add to Rent Squeeze via WSJ
Developer Mark Randall cut his teeth over the last few decades building apartments for Atlanta’s middle-class with properties such as Alta Ridgewalk, a complex of low-rise buildings clustered around a swimming pool in suburban Atlanta.
That development stands in contrast to one of his newer projects, a luxury project dubbed Inman Quarter. Located in a trendy neighborhood east of downtown Atlanta, the units feature quartz countertops and the complex has a rooftop club room; the ground floor is filled with retail stores and restaurants. Rents in the complex, which officially opened a few weeks ago, run as high as $4,000 a month.
Read more...New Luxury Rental Projects Add to Rent Squeeze - WSJ
That development stands in contrast to one of his newer projects, a luxury project dubbed Inman Quarter. Located in a trendy neighborhood east of downtown Atlanta, the units feature quartz countertops and the complex has a rooftop club room; the ground floor is filled with retail stores and restaurants. Rents in the complex, which officially opened a few weeks ago, run as high as $4,000 a month.
Read more...New Luxury Rental Projects Add to Rent Squeeze - WSJ
For Millennials, Low Ownership Rates Weigh on Household Formation via Property Management Insider
The Millennial generation is frequently a topic of discussion in the real estate industry along with almost every other. While fascination in any cohort that is emerging into adulthood is a recurring theme in modern history, the immense size of the Millennial population has heightened anticipation of their entrance into the housing market. However, the first young adults in this generation haven’t participated in the housing market as much as other generations have during the same stage of life. This phenomenon has greatly shaped the housing landscape. But it has affected the rental market and ownership market differently.
At the root of the issue: Household formation among Generation Y is down. In order to form a household, a person, family or other group of people must occupy a rented or purchased dwelling. But the first young adults in the Millennial generation haven’t consumed housing units – therefore haven’t created households – at the same rate as young adults in the previous generation.
Read more...For Millennials, Low Ownership Rates Weigh on Household Formation | Property Management Insider
At the root of the issue: Household formation among Generation Y is down. In order to form a household, a person, family or other group of people must occupy a rented or purchased dwelling. But the first young adults in the Millennial generation haven’t consumed housing units – therefore haven’t created households – at the same rate as young adults in the previous generation.
Read more...For Millennials, Low Ownership Rates Weigh on Household Formation | Property Management Insider
Modest Growth Expected in Commercial Real Estate Markets via realtor.org
A stronger labor market and increasing household formation should keep commercial real estate demand on a gradual incline, according to the National Association of Realtors® quarterly commercial real estate forecast.
National office vacancy rates are forecast to slightly decrease 0.1 percent over the coming year as the demand for office space slowly improves. The vacancy rate for industrial space is expected to decline 0.3 percent and retail space 0.4 percent as manufacturing output increases and low gas prices and slight income gains boost consumer spending. An influx in new apartment construction is forecast to cause an uptick (0.1 percent) in the multifamily vacancy rate.
Read more...Modest Growth Expected in Commercial Real Estate Markets | realtor.org
National office vacancy rates are forecast to slightly decrease 0.1 percent over the coming year as the demand for office space slowly improves. The vacancy rate for industrial space is expected to decline 0.3 percent and retail space 0.4 percent as manufacturing output increases and low gas prices and slight income gains boost consumer spending. An influx in new apartment construction is forecast to cause an uptick (0.1 percent) in the multifamily vacancy rate.
Read more...Modest Growth Expected in Commercial Real Estate Markets | realtor.org
CBRE: DFW Multifamily Marketview 1Q 2015 via Real Estate Center at Texas A&M
According to CBRE Marketview first quarter 2015, 2014’s strong momentum continues into 2015 for DFW’s multifamily market.
In 1Q 2015 over 5,700 units were absorbed, an increase of over 5,000 units from 4Q 2014.
For the fourth consecutive quarter, average monthly rents remained over $1.00 per sf for DFW.
Read more...CBRE: DFW Multifamily Marketview 1Q 2015 via Real Estate Center at Texas A&M
In 1Q 2015 over 5,700 units were absorbed, an increase of over 5,000 units from 4Q 2014.
For the fourth consecutive quarter, average monthly rents remained over $1.00 per sf for DFW.
Read more...CBRE: DFW Multifamily Marketview 1Q 2015 via Real Estate Center at Texas A&M
What Factors Correlate with Apartment Resident Turnover? via Property Management Insider
What do a metro’s median age and economic strength have to do with apartment renter turnover? It turns out, the connection is strong. It also turns out that household income, Millennial population and rent growth have very little to do with lease renewal conversion.
MPF Research recently covered the metro areas with the highest and lowest apartment renewal conversion rates. Renewal conversion is the share of apartment residents with expiring leases choosing to renew their leases instead of moving out. The higher the retention rate, the less mobile the renter base.
Read more...What Factors Correlate with Apartment Resident Turnover? | Property Management Insider
MPF Research recently covered the metro areas with the highest and lowest apartment renewal conversion rates. Renewal conversion is the share of apartment residents with expiring leases choosing to renew their leases instead of moving out. The higher the retention rate, the less mobile the renter base.
Read more...What Factors Correlate with Apartment Resident Turnover? | Property Management Insider
Friday, May 22, 2015
Zillow: Rents gallop past home values in April via HousingWire
Rents for residential housing in the United States grew at their fastest pace in two years in April, surpassing home values, according to Zillow’s latest real estate market report.
Rents outpaced home values in 20 of the 35 largest U.S. housing markets.
Perhaps more telling, home value growth is expected to slow further in the second half of the year as the for-sale housing market stabilizes – meaning the gap could grow substantially.
Read more...Zillow: Rents gallop past home values in April | 2015-05-21 | HousingWire
Rents outpaced home values in 20 of the 35 largest U.S. housing markets.
Perhaps more telling, home value growth is expected to slow further in the second half of the year as the for-sale housing market stabilizes – meaning the gap could grow substantially.
Read more...Zillow: Rents gallop past home values in April | 2015-05-21 | HousingWire
Economy Watch: There Are Fewer Apartment Applicant Deadbeats Than Before via Multi-Housing News Online
The U.S. apartment market has been strengthening in a number of ways—occupancies, rental rates, ROI—for a number of years now, but that’s not the only optimistic metric for the industry. CoreLogic tracks the overall likelihood that apartment applicants won’t be able to pay their rents; their creditworthiness, in other words. It turns out that the risk in the renter pool is lower now than any time since the onset of the recession. In some ways, that’s an entirely intuitive result, since the economy has been getting better for the last five years, slowly but surely, and other metrics of individual financial problems are also becoming more positive, such as personal bankruptcy and residential foreclosure rates.
But there seems to be more to the strength of renters than a rising economic tide. According to CoreLogic, the risk of default among renters nationwide dropped in the first quarter year-over-year, as reflected in its SafeRent Renter Applicant Risk (RAR) Index.
Read more...Economy Watch: There Are Fewer Apartment Applicant Deadbeats Than Before | Multi-Housing News Online
But there seems to be more to the strength of renters than a rising economic tide. According to CoreLogic, the risk of default among renters nationwide dropped in the first quarter year-over-year, as reflected in its SafeRent Renter Applicant Risk (RAR) Index.
Read more...Economy Watch: There Are Fewer Apartment Applicant Deadbeats Than Before | Multi-Housing News Online
MPF's early 2015 ranks DFW No. 5 in apartment leaders via Real Estate Center at Texas A&M
The nation’s apartment demand volume in first quarter 2015 proved very impressive, according to Greg Willet at MPF Research.
Preliminary figures show that absorption across the country’s 100 largest metros came in at roughly 64,300 units, a jump of 55 percent from the demand tally seen during the initial three months of 2014.
Dallas-Fort Worth ranked No. 5:
Consistently the country’s top apartment demand market in recent years, North Texas is also adding more jobs than any other locale and is an active construction center.
Read more...MPF's early 2015 ranks DFW No. 5 in apartment leaders
Preliminary figures show that absorption across the country’s 100 largest metros came in at roughly 64,300 units, a jump of 55 percent from the demand tally seen during the initial three months of 2014.
Dallas-Fort Worth ranked No. 5:
Consistently the country’s top apartment demand market in recent years, North Texas is also adding more jobs than any other locale and is an active construction center.
Read more...MPF's early 2015 ranks DFW No. 5 in apartment leaders
After Riding Apt. Value Wave, Investors Taking Long Look at Cashing Out, Diversification via CoStar Group
The multifamily markets in most metros are well into the late expansion phase of the real estate cycle, while other product types, notably office and retail, are still in the early stages of their expansion in most U.S. markets, according to CoStar's First Quarter 2015 Multifamily Market Review and Forecast.
As apartment rents and occupancy growth begin to taper in the face of new supply, owners of multifamily properties may be considering selling some assets or diversifying their portfolios with other property types that may offer more yield and occupancy stability, according to CoStar director of U.S. research, multifamily Luis Mejia, who presented the quarterly findings along with quantitative analyst Mark Hickey and real estate economist Francis Yuen.
Read more...After Riding Apt. Value Wave, Investors Taking Long Look at Cashing Out, Diversification - CoStar Group
As apartment rents and occupancy growth begin to taper in the face of new supply, owners of multifamily properties may be considering selling some assets or diversifying their portfolios with other property types that may offer more yield and occupancy stability, according to CoStar director of U.S. research, multifamily Luis Mejia, who presented the quarterly findings along with quantitative analyst Mark Hickey and real estate economist Francis Yuen.
Read more...After Riding Apt. Value Wave, Investors Taking Long Look at Cashing Out, Diversification - CoStar Group
Thursday, May 21, 2015
Population gain in Dallas-Fort Worth is eye-popping, census figures show via Dallas Morning News
After listening to a jumble of census numbers detailing Texas’ continued population boom, especially the explosion in his town, Frisco Mayor Maher Maso seems almost apologetic.
“We just can’t seem to help it,” he said.
The latest estimates from the U.S. Census Bureau indicate that the staggering growth of small and medium-size cities across the Dallas region shows no sign of slowing.
And five Texas cities are among the U.S. top 10 in population gain between July 1, 2013, and July 1, 2014 — Houston, Austin, San Antonio, Dallas and Fort Worth, with each adding from 18,000 to almost 36,000 people in that 12-month period.
Read more...Population gain in Dallas-Fort Worth is eye-popping, census figures show | Dallas Morning News
“We just can’t seem to help it,” he said.
The latest estimates from the U.S. Census Bureau indicate that the staggering growth of small and medium-size cities across the Dallas region shows no sign of slowing.
And five Texas cities are among the U.S. top 10 in population gain between July 1, 2013, and July 1, 2014 — Houston, Austin, San Antonio, Dallas and Fort Worth, with each adding from 18,000 to almost 36,000 people in that 12-month period.
Read more...Population gain in Dallas-Fort Worth is eye-popping, census figures show | Dallas Morning News
Luxury Apartments Galore: At What Cost? via Multifamily Executive Magazine
Marshall Rosen doesn’t really want you to read this article.
That’s because the CEO of Summit, N.J.–based Solomon Organization, which owns 10,000 predominantly Class B apartments spread across New York, New Jersey, Pennsylvania, and Connecticut, doesn’t want you bidding against him on his next deal.
After all, he’s enjoyed relatively little competition from other operators going after Class B assets in his core markets: He closed on approximately $200 million in properties in a recent 12-month span—and he’d like it to stay that way.
Read more...Luxury Apartments Galore: At What Cost? | Multifamily Executive Magazine | Rent Trends, Luxury, Capital Markets, Economics, The Solomon Organization, Axiometrics, Zillow
That’s because the CEO of Summit, N.J.–based Solomon Organization, which owns 10,000 predominantly Class B apartments spread across New York, New Jersey, Pennsylvania, and Connecticut, doesn’t want you bidding against him on his next deal.
After all, he’s enjoyed relatively little competition from other operators going after Class B assets in his core markets: He closed on approximately $200 million in properties in a recent 12-month span—and he’d like it to stay that way.
Read more...Luxury Apartments Galore: At What Cost? | Multifamily Executive Magazine | Rent Trends, Luxury, Capital Markets, Economics, The Solomon Organization, Axiometrics, Zillow
Wednesday, May 20, 2015
IRR: Austin multifamily 2015 viewpoint via Real Estate Center at Texas A&M
Strong population growth, the attraction of new business, and low unemployment continue to drive the expansion of the Austin multifamily market.
Overall vacancy has held steady at just under 5 percent in the past two years but is expected to increase slightly in 2015, as more than 13,000 new units are expected to be completed.
Rental rates for both A and B/C property classes continue to increase, with units in central and west Austin seeing the highest rates, as demand remains strong.
Read more...IRR: Austin multifamily 2015 viewpoint
Overall vacancy has held steady at just under 5 percent in the past two years but is expected to increase slightly in 2015, as more than 13,000 new units are expected to be completed.
Rental rates for both A and B/C property classes continue to increase, with units in central and west Austin seeing the highest rates, as demand remains strong.
Read more...IRR: Austin multifamily 2015 viewpoint
MF Dominates as Housing Starts Gain via GlobeSt.com
April housing starts rose 20.2% nationwide from an upwardly revised March tally, according to Census Bureau data released Tuesday. New construction in the multifamily sector outshone single-family starts, with apartment builds up 27.2% from the previous month to a seasonally adjusted annual rate of 402,000 units, compared to a 16.7% increase for single-family.
The National Association of Home Builders cheered the results, pointing out that April’s seasonally adjusted annual rate of 1.135 million units represented the highest level of housing production since November 2007.
Read more...MF Dominates as Housing Starts Gain - Daily News Article - GlobeSt.com
The National Association of Home Builders cheered the results, pointing out that April’s seasonally adjusted annual rate of 1.135 million units represented the highest level of housing production since November 2007.
Read more...MF Dominates as Housing Starts Gain - Daily News Article - GlobeSt.com
More apartment rent increases coming in North Texas via Dallas Morning News
A flood of new apartment completions this year may not bring much relief to renters.
The Dallas-Fort Worth area’s apartment rents in the first quarter were more than 5 percent higher than a year earlier — a record annual increase for North Texas.
With 20,000 apartments set to open in 2015, industry analysts were expecting a slowdown in rent growth.
But that’s not happening yet.
Read more...More apartment rent increases coming in North Texas | Dallas Morning News
The Dallas-Fort Worth area’s apartment rents in the first quarter were more than 5 percent higher than a year earlier — a record annual increase for North Texas.
With 20,000 apartments set to open in 2015, industry analysts were expecting a slowdown in rent growth.
But that’s not happening yet.
Read more...More apartment rent increases coming in North Texas | Dallas Morning News
Where are Apartment Resident Retention Rates Highest and Lowest? via Property Management Insider
Apartment resident retention rates continue to climb across the country. Even with rapidly rising rental rates and record volumes of apartment construction, apartment renters are increasingly choosing to stay put rather than move out.
So, which markets are apartment renters most likely – and least likely – to renew their leases? MPF Research compiled the average renewal conversion rate over the past 12 months (from May 2014 to April 2015) in the nation’s 50 largest metro areas. The results may surprise you – with the top markets tending to be slow-growth metros in the Midwest and Northeast.
Read more...Where are Apartment Resident Retention Rates Highest and Lowest? | Property Management Insider
So, which markets are apartment renters most likely – and least likely – to renew their leases? MPF Research compiled the average renewal conversion rate over the past 12 months (from May 2014 to April 2015) in the nation’s 50 largest metro areas. The results may surprise you – with the top markets tending to be slow-growth metros in the Midwest and Northeast.
Read more...Where are Apartment Resident Retention Rates Highest and Lowest? | Property Management Insider
Monday, May 18, 2015
Apartments: Supply and Demand via Calculated Risk
Time flies! It was five years ago that we started discussing the turnaround for apartments. Then, in January 2011, I attended the NMHC Apartment Strategies Conference in Palm Springs, and the atmosphere was very positive. (Note: This is an update to a post I wrote a year ago).
The drivers were 1) very low new supply, and 2) strong demand (favorable demographics, and people moving from owning to renting).
Demographics are still favorable, but my sense is the move "from owning to renting" has slowed. And more supply has been coming online.
Read more...Calculated Risk: Apartments: Supply and Demand
The drivers were 1) very low new supply, and 2) strong demand (favorable demographics, and people moving from owning to renting).
Demographics are still favorable, but my sense is the move "from owning to renting" has slowed. And more supply has been coming online.
Read more...Calculated Risk: Apartments: Supply and Demand
Houston Economic Indicators May 2015 via Dallas Fed
The Houston Business Cycle Index has decelerated in five of the past six months. In March, the index slowed to a growth rate 0.3 percent after rising 2.6 percent in February. Employment growth flirted with zero in March, and measures of construction and real estate also weakened sharply. The value of goods moving through the region’s
ports suffered under the weight of a strong dollar and falling energy prices. On balance, the Houston outlook continues to erode in the near term.
Annualized employment growth over the first three months of 2015 was 0.3 percent, the weakest three month change since January 2010. Declines in manufacturing, construction and mining, and professional and business services have largely been counterbalanced by growth in leisure and hospitality and education and health. While information services grew aggressively in early 2015, it accounts for only 1.1 percent of total employment.
Read more...Houston Economic Indicators May 2015 via Dallas Fed
Annualized employment growth over the first three months of 2015 was 0.3 percent, the weakest three month change since January 2010. Declines in manufacturing, construction and mining, and professional and business services have largely been counterbalanced by growth in leisure and hospitality and education and health. While information services grew aggressively in early 2015, it accounts for only 1.1 percent of total employment.
Read more...Houston Economic Indicators May 2015 via Dallas Fed
Friday, May 15, 2015
Rent Growth Steady via Axiometrics
Rent growth in the national apartment market is on a streak not seen for almost four years.
Annual effective rent growth for U.S. apartments in April 2015 remained steady at 5.0%, the third straight month it has been at or above 5%. The figure represents the highest April rate since at least 2009, when Axiometrics began reporting the metric monthly.
Read more...Rent Growth Steady
Annual effective rent growth for U.S. apartments in April 2015 remained steady at 5.0%, the third straight month it has been at or above 5%. The figure represents the highest April rate since at least 2009, when Axiometrics began reporting the metric monthly.
Read more...Rent Growth Steady
Rental Crisis via The Balance Sheet - Yardi Corporate Blog
Awareness of the affordable housing crisis has grown incrementally inside of industry circles. Unfortunately, public awareness is still woefully low and solutions to the problem have yet to manifest. A new organization lead by Ron Terwilliger will collect data that can guide policymakers towards crisis resolution and simultaneously help to protect the most vulnerable victims of the affordable housing crisis, America’s youth and seniors.
“A legacy of the great recession, the rental affordability crisis is often overlooked by policymakers, ignored by the media, and underestimated, at best, by the general public,” announced Ron Terwilliger, former CEO of Trammell Crow Residential.
Read more...Rental Crisis | The Balance Sheet - Yardi Corporate Blog
“A legacy of the great recession, the rental affordability crisis is often overlooked by policymakers, ignored by the media, and underestimated, at best, by the general public,” announced Ron Terwilliger, former CEO of Trammell Crow Residential.
Read more...Rental Crisis | The Balance Sheet - Yardi Corporate Blog
Commercial Market Continues Recovery, Says NAR Chief Economist via realtor.org
While the commercial market still faces its share of challenges, Realtors® specializing in commercial real estate expressed confidence in the marked improvement seen in the market over the last year at a commercial economic issues and trends forum at the REALTORS® Legislative Meetings & Trade Expo.
National Association of Realtors® Chief Economist Lawrence Yun led a panel discussion about the forces shaping commercial real estate markets. The panelists agreed that the market has improved and expressed confidence that continued recovery in the economy will drive commercial real estate growth.
Read more...Commercial Market Continues Recovery, Says NAR Chief Economist | realtor.org
National Association of Realtors® Chief Economist Lawrence Yun led a panel discussion about the forces shaping commercial real estate markets. The panelists agreed that the market has improved and expressed confidence that continued recovery in the economy will drive commercial real estate growth.
Read more...Commercial Market Continues Recovery, Says NAR Chief Economist | realtor.org
Wednesday, May 13, 2015
Downtown Fort Worth, Inc. Releases 2014 'State of Downtown' Report via PRNewswire
Downtown Fort Worth, Inc. has released its 2014 State of Downtown Report, a yearly publication that offers in-depth analysis of Downtown's primary real estate performance indicators and economic, social and education data.
According to data from the report, Downtown has maintained a 95.5% average retail occupancy rate and experienced a 50.5% increase in clothing store sales since 2006. Findings from the report also indicate a growing demand for Downtown housing. Apartment occupancy remained above 94% for the year, while inventory grew by 11.6% with the addition of 262 units. More than 1,314 new rental units are currently planned or under construction.
Downtown Fort Worth is the largest employment center in Tarrant County generating over $2.9 billion in private payroll with more than 46,000 jobs.
Read more...Downtown Fort Worth, Inc. Releases 2014 'State of Downtown' Report -- FORT WORTH, Texas, May 12, 2015 /PRNewswire-USNewswire/ --
According to data from the report, Downtown has maintained a 95.5% average retail occupancy rate and experienced a 50.5% increase in clothing store sales since 2006. Findings from the report also indicate a growing demand for Downtown housing. Apartment occupancy remained above 94% for the year, while inventory grew by 11.6% with the addition of 262 units. More than 1,314 new rental units are currently planned or under construction.
Downtown Fort Worth is the largest employment center in Tarrant County generating over $2.9 billion in private payroll with more than 46,000 jobs.
Read more...Downtown Fort Worth, Inc. Releases 2014 'State of Downtown' Report -- FORT WORTH, Texas, May 12, 2015 /PRNewswire-USNewswire/ --
Survey: More Millennials Renting, But Just As Many Want To Own via WSJ
More millennials are renting now than were five years ago, but most of them still aspire to live in single-family, detached homes in the near future.
Sound familiar? It should. Those are two of the main findings of an Urban Land Institute-commissioned survey of Americans of age 19 to 36 discussing their housing preferences and finances. The survey, to be released Wednesday, is the latest in a long line of assessments of millennials’ housing druthers. It’s a much studied topic that, nonetheless, doesn’t always yield consistent outlooks.
Read more...Survey: More Millennials Renting, But Just As Many Want To Own - Developments - WSJ
Sound familiar? It should. Those are two of the main findings of an Urban Land Institute-commissioned survey of Americans of age 19 to 36 discussing their housing preferences and finances. The survey, to be released Wednesday, is the latest in a long line of assessments of millennials’ housing druthers. It’s a much studied topic that, nonetheless, doesn’t always yield consistent outlooks.
Read more...Survey: More Millennials Renting, But Just As Many Want To Own - Developments - WSJ
Tuesday, May 12, 2015
ALN Monthly Newsletter May 2015 via ALN Apartment Data
ALN Data just released their April 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 May 2015 via ALN Apartment Data
Read more...ALN Monthly Newsletter May 2015 via ALN Apartment Data
Good News for Multifamily Rent Growth via National Real Estate Investor
April gave a strong hint that 2015 may be another good year for apartments. “An impressive start to the peak leasing season could point to another big year for the U.S. apartment industry—counter to mainstream expectations of slowing momentum,” says Jay Parsons, director of analytics and forecasts for MPF Research and RealPage Inc.
Apartment rents grew more quickly in April than in any other month since the recovery from the financial crisis, according to data released by MPF on May 11. “Rent growth in April 2015 topped the previous highs we saw during this cycle back in 2011,” says Parsons.
Read more...Good News for Multifamily Rent Growth | Multifamily content from National Real Estate Investor
Apartment rents grew more quickly in April than in any other month since the recovery from the financial crisis, according to data released by MPF on May 11. “Rent growth in April 2015 topped the previous highs we saw during this cycle back in 2011,” says Parsons.
Read more...Good News for Multifamily Rent Growth | Multifamily content from National Real Estate Investor
Monday, May 11, 2015
Economy Watch: How Strong is Employment Among Millennials? via Multi-Housing News Online
The April Bureau of Labor Statistics employment report was generally good news, with a net gain of 223,000 jobs and an unemployment rate of 5.4 percent, the lowest that metric has been in the last seven years, since the onset months of the recession (but before the panic that made it a Great Recession). The BLS also breaks employment down by age group, and there also seems to be good news in those stats for the prospect of sustained household formation in younger age groups. Not that the employment prospects are amazingly bright for younger Americans, especially when compared to older adults, but simply that they’re also better than they have been at any time since before the recession, like the overall employment numbers.
Read more...Economy Watch: How Strong is Employment Among Millennials? | Multi-Housing News Online
Read more...Economy Watch: How Strong is Employment Among Millennials? | Multi-Housing News Online
Rent is rising, but millennials will fork over the cash via HousingWire
Rental rates are rising all across the country, and the trend is not forecasted to change anytime soon. But this might not be a problem for millennials.
Rent.com conducted a survey of 1,000 millennial renters to find out how they are planning their next move, finding more than half (57%) rank affordability as the most important factor when choosing an apartment. Yet when asked, 55% said they are willing to spend up to $150 more per month in order to stay in an apartment they love. Nearly one in four respondents (24%) are willing to shell out an additional $400 a month, just to keep their pad.
And looking at industry trends, they might have to pay that extra money soon.
Read more...Rent is rising, but millennials will fork over the cash | 2015-05-08 | HousingWire
Rent.com conducted a survey of 1,000 millennial renters to find out how they are planning their next move, finding more than half (57%) rank affordability as the most important factor when choosing an apartment. Yet when asked, 55% said they are willing to spend up to $150 more per month in order to stay in an apartment they love. Nearly one in four respondents (24%) are willing to shell out an additional $400 a month, just to keep their pad.
And looking at industry trends, they might have to pay that extra money soon.
Read more...Rent is rising, but millennials will fork over the cash | 2015-05-08 | HousingWire
Apartment Rent Growth Levels Hits New Highs For Both New Leases and Renewals via Property Management Insider
The U.S. apartment industry continues to exceed performance expectations, with real rent growth levels in April 2015 surpassing the cycle’s previous peak set back in 2011.
New highs in rent growth were seen for both new resident leases and for renewal leases.
April 2015, total lease-over-lease rent growth nationally measured 6.1% — well above the 2011 peak of 5.3%, based on actual executed rents for both new leases and renewals. (Lease-over-lease rent growth, also called trade-out, is a comparison between the previous lease effective rent to the new lease effective rent on the same unit.)
Read more...Apartment Rent Growth Levels Hits New Highs For Both New Leases and Renewals | Property Management Insider
New highs in rent growth were seen for both new resident leases and for renewal leases.
April 2015, total lease-over-lease rent growth nationally measured 6.1% — well above the 2011 peak of 5.3%, based on actual executed rents for both new leases and renewals. (Lease-over-lease rent growth, also called trade-out, is a comparison between the previous lease effective rent to the new lease effective rent on the same unit.)
Read more...Apartment Rent Growth Levels Hits New Highs For Both New Leases and Renewals | Property Management Insider
IRR: Dallas multifamily report 1Q 2015 via Real Estate Center at Texas A&M
Strong population growth within the region, low unemployment, corporate relocations and expanding business across several key industry sectors continue to drive the expansion of the Dallas multifamily market.
Overall vacancy held steady at around 5 percent throughout 2014 and is expected to increase slightly in 2015 as nearly 10,000 new units are expected to be completed.
Absorption remained positive for all classes, in both the suburban and urban setting, and this trend is expected to continue for the next several years.
Read more...IRR: Dallas multifamily report 1Q 2015
Overall vacancy held steady at around 5 percent throughout 2014 and is expected to increase slightly in 2015 as nearly 10,000 new units are expected to be completed.
Absorption remained positive for all classes, in both the suburban and urban setting, and this trend is expected to continue for the next several years.
Read more...IRR: Dallas multifamily report 1Q 2015
Friday, May 8, 2015
Commercial Lending Survey via realtor.org
Report Highlights:
-Commercial vacancy rates declined for the core property types. Availability is expected to continue contracting for office, industrial and retail properties in 2015 and beyond.
-Vacancies for apartments are estimated to rise, due to gains in supply.
-Commercial rents have risen across the board, and are projected to advance this year to the tune of 2.5 percent to 3.7 percent.
-Lending conditions in REALTOR® markets notched another year of sustainable recovery.
Read more...Commercial Lending Survey | realtor.org
-Commercial vacancy rates declined for the core property types. Availability is expected to continue contracting for office, industrial and retail properties in 2015 and beyond.
-Vacancies for apartments are estimated to rise, due to gains in supply.
-Commercial rents have risen across the board, and are projected to advance this year to the tune of 2.5 percent to 3.7 percent.
-Lending conditions in REALTOR® markets notched another year of sustainable recovery.
Read more...Commercial Lending Survey | realtor.org
Austin Economic Indicators May 7 2015 via Dallas Fed
The Austin economy expanded modestly in March. Jobs grew at an annualized 0.4 percent rate, compared with a 1.2 percent contraction for the state overall. The unemployment rate remained flat at a low 3.4 percent. Austin housing market indicators were mixed, with low inventories and strong home price appreciation indicating strength but permit and construction data suggesting some weakness. The Austin Purchasing Managers Index points to some improvement in manufacturing activity in April.
The Austin Business-Cycle Index moderated in March, though it expanded at a rapid 7.8 percent annualized pace over the six months ending in March. Over this time, annualized job growth has been 3 percent and the unemployment rate has fallen 0.6 percentage points to 3.4 percent. While the Austin economy continues to grow robustly, it has gradually decelerated since the end of 2013, likely due in part to very tight labor markets. With the sharp decline in the oil and gas sector of Texas and the slowing in the state’s economy, the Austin economy is likely to continue to moderate in the coming months.
Read more...Austin Economic Indicators May 7 2015 via Dallas Fed
The Austin Business-Cycle Index moderated in March, though it expanded at a rapid 7.8 percent annualized pace over the six months ending in March. Over this time, annualized job growth has been 3 percent and the unemployment rate has fallen 0.6 percentage points to 3.4 percent. While the Austin economy continues to grow robustly, it has gradually decelerated since the end of 2013, likely due in part to very tight labor markets. With the sharp decline in the oil and gas sector of Texas and the slowing in the state’s economy, the Austin economy is likely to continue to moderate in the coming months.
Read more...Austin Economic Indicators May 7 2015 via Dallas Fed
Commercial, multifamily mortgage lending skyrockets 49% in 1Q via HousingWire
Commercial and multifamily mortgage loan originations took off like a rocket in the first quarter, fully 49% higher than during the same period last year, according to the Mortgage Bankers Association’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
First quarter originations usually drop from fourth quarter and this year was no different — originations saw a decrease of 26% from fourth quarter 2014.
Read more...Commercial, multifamily mortgage lending skyrockets 49% in 1Q | 2015-05-08 | HousingWire
First quarter originations usually drop from fourth quarter and this year was no different — originations saw a decrease of 26% from fourth quarter 2014.
Read more...Commercial, multifamily mortgage lending skyrockets 49% in 1Q | 2015-05-08 | HousingWire
Thursday, May 7, 2015
Multifamily can Pick up the PACE for Improving Energy Efficiency via Property Management Insider
Fannie Mae recently announced a program to give discounts on interest rates for financing multifamily projects if buildings are energy-certified. And a once bruised energy financing program that rolled out in 2008 is making the rounds again.
At the Crittenden Conference in Fort Worth, Texas, recently, panelists talked up the Property Assessed Clean Energy (PACE) program which offers energy and utility upgrade financing through private lenders. Moderator Glenn Adams of AEI Consultants said the program is gaining momentum and presents a viable option for multifamily operators to boost energy and utility efficiency without huge capital outlays.
Read more...Multifamily can Pick up the PACE for Improving Energy Efficiency | Property Management Insider
At the Crittenden Conference in Fort Worth, Texas, recently, panelists talked up the Property Assessed Clean Energy (PACE) program which offers energy and utility upgrade financing through private lenders. Moderator Glenn Adams of AEI Consultants said the program is gaining momentum and presents a viable option for multifamily operators to boost energy and utility efficiency without huge capital outlays.
Read more...Multifamily can Pick up the PACE for Improving Energy Efficiency | Property Management Insider
Apartment Market Statistics May 2015 via Multi-Housing News Online
According to forecasts by Marcus & Millichap, 210,000 units will be completed in 2015 in major metropolitan areas, with average effective rents of $1,219 and average vacancy rates of 4.8 percent. Average price per unit sold in 2014 is estimated at $121,231.
Growth in housing starts of buildings with five or more units started 2015 on a strong note, according to the National Association of Home Builders (NAHB).
Read more...APARTMENT MARKET STATISTICS: May 2015 | Multi-Housing News Online
Growth in housing starts of buildings with five or more units started 2015 on a strong note, according to the National Association of Home Builders (NAHB).
Read more...APARTMENT MARKET STATISTICS: May 2015 | Multi-Housing News Online
Wednesday, May 6, 2015
What's Your Multifamily Investing Style: Passive or Proactive? via AppFolio
Whether you’re getting ready to buy your first property, or your tenth, these tips for proactively managing your appreciation will help you plan for higher returns on investment.
Multifamily apartment buildings often come with hidden value. Distracted owners and poorly focused, or inexperienced, property managers may defer maintenance, which leads to run down buildings and high turnover rates. Sometimes lackluster performance can be turned around with strategic renovations and an engaged management team.
As you tour potential properties, keep in mind the goal is to force appreciation – increase net operating income. Identifying simple fixes that significantly boost value for tenants while controlling operating expenses is a proactive step every investor can make.
Read more...What's Your Multifamily Investing Style: Passive or Proactive?
Multifamily apartment buildings often come with hidden value. Distracted owners and poorly focused, or inexperienced, property managers may defer maintenance, which leads to run down buildings and high turnover rates. Sometimes lackluster performance can be turned around with strategic renovations and an engaged management team.
As you tour potential properties, keep in mind the goal is to force appreciation – increase net operating income. Identifying simple fixes that significantly boost value for tenants while controlling operating expenses is a proactive step every investor can make.
Read more...What's Your Multifamily Investing Style: Passive or Proactive?
Why Apartment Investors Should Write off the Popular Jobs-per-Demand Metric via Property Management Insider
How many jobs does it take to create one unit of apartment demand? It’s a common question many investors want answered before pursuing a deal. The jobs-to-demand ratio has become a staple of nearly every apartment investment package, a standard metric alongside cap rate and rent growth. But can the jobs-to-demand ratio, viewed alone, do what it’s intended to do – predict future apartment absorption?
Not at all. Not even as a back-of-the-napkin, ballpark estimator. Its track record is surprisingly bad.
Read more...Why Apartment Investors Should Write off the Popular Jobs-per-Demand Metric | Property Management Insider
Not at all. Not even as a back-of-the-napkin, ballpark estimator. Its track record is surprisingly bad.
Read more...Why Apartment Investors Should Write off the Popular Jobs-per-Demand Metric | Property Management Insider
As Agencies Change Focus, LTVs Rise via Multifamily Executive Magazine
In its March 2015 market report, Real Capital Analytics took a deep dive into 2014’s lending environment. And, while cries of overheated market have been prevalent for a couple of years now, the research firm found that underwriting assumptions only grew slightly more aggressive in 2014 than 2013.
The average LTV on apartment loans climbed to 69% in 2014, after hitting 67% the year before. The big driver of that movement was agency lending, which went from from 65% in 2013 to 69% in 2014.
Read more...As Agencies Change Focus, LTVs Rise | Multifamily Executive Magazine
The average LTV on apartment loans climbed to 69% in 2014, after hitting 67% the year before. The big driver of that movement was agency lending, which went from from 65% in 2013 to 69% in 2014.
Read more...As Agencies Change Focus, LTVs Rise | Multifamily Executive Magazine
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