Thursday, July 30, 2015

No Slowdown in Apt. Rent Gains via

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 -

Wednesday, July 29, 2015

Austin Rental Rates Up 10 Percent Over Last Year via

New numbers show Austin rental rates are rising. For the second quarter of 2015, the average monthly rent for a single-family home in the Austin area is $1580. That's up 10 percent compared to last year. It's a perfect storm for investors. Rent is high, availability is low and renting becomes more popular each day in Austin.

After a year of renting, Julia Webber returns to her newly remodeled home with a renovated perspective.

"I was shocked to see what the rental costs were versus the condition of the rental property that we ended up having," said Webber.

Read more...Austin Rental Rates Up 10 Percent Over Last Year - Austin News, Weather, Traffic KEYE-TV Austin - Top Stories

Why The Apartment Cycle Is Good For Five More Years via

Fundamentals in the multifamily space should continue their golden trajectory for several more years, based on the latest numbers about US homeownership from the US Census Bureau. Indeed, coupled with other recent reports on multifamily dynamics, it is safe to call the asset class bullet proof, at least for the medium term.

US home ownership, of course, has been steadily falling since the Great Recession. On Tuesday, though, it hit a low that gives one pause -- to say nothing of putting it within spitting distance of awe-inspiring benchmark.

US homeownership is now at 63.4%, which is the lowest level of home ownership in this country since 1967. There is little to suggest it won’t stop falling: in Q1 it was at 63.7%. In 1965, when the government started tracking home ownership the level was 63% -- a percentage that seems like it is but a few quarters away again.

Read more...Why The Apartment Cycle Is Good For Five More Years - Daily News Article -

Tuesday, July 28, 2015

Homeownership in U.S. Drops to a 47-Year Low, Now 63.4 Percent in Q2 - WORLD PROPERTY JOURNAL

According to the Department of Commerce's Census Bureau, homeownership in the U.S. is at a new 47-year low.

The homeownership rate is now 63.4 percent was 1.3 percentage points lower than the second quarter 2014 rate (64.7 percent), and 0.4 percentage points lower than the rate last quarter (63.7 percent). This is the seventh consecutive year of declining homeowneship rates in the U.S. since the 2008 housing market peak.

Read more...Homeownership in U.S. Drops to a 47-Year Low, Now 63.4 Percent in Q2 - WORLD PROPERTY JOURNAL Global News Center

Monday, July 27, 2015

DFW Economic Indicators July 2015 via Dallas Fed

The Dallas–Fort Worth economy expanded in June at a faster pace than in May. Year to date, DFW payrolls grew 2.2 percent, outperforming the state’s 1.2 percent rate. Home price appreciation slowed slightly, and residential construction activity remained healthy. Unemployment fell in Dallas and held steady in Fort Worth in June. Dallas Fed business-cycle indexes point to continued growth for the metroplex.

DFW employment grew at an annualized rate of 4.6 percent in June, adding 12,600 jobs. Job creation picked up, rising 3 percent (24,600 jobs) in the second quarter, compared with 1.3 percent (11,200 jobs) in the first quarter. Over the past 12 months, the metroplex has created jobs at a 3.3 percent rate, second only to Austin, which grew 3.6 percent.

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

2015's Apartment Sales on Pace to Beat 2006 via Multifamily Executive Magazine

With Clarion’s acquisition of Gables and a flurry of one-off deals, 2015’s first half posted sales numbers that pushed this year’s pace above the torrid run of 2006.

In the first half of 2015, $63.2 billion worth of apartments changed hands, a 37.6% increase compared with last year, according to Real Capital Analytics (RCA). The second quarter produced $29.7 billion worth of this activity, a 13% increase over 2014’s second quarter.

Read more...2015's Apartment Sales on Pace to Beat 2006 | Multifamily Executive Magazine

Texas Manufacturing Outlook Survey July 27, 2015 via Dallas Fed

Texas factory activity declined slightly in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained negative but rose for a second month in a row to -1.9, suggesting further moderation in the decline in manufacturing output.

A similar pattern was seen among other measures of current manufacturing activity in July. The capacity utilization index edged up to -4.2, and the shipments index increased to -4.3. These negative index levels indicate contraction, but the upward movement again this month suggests the pace of decline continued to slow. The new orders index rebounded strongly in July and posted a reading of 0.7 after six months in negative territory. The growth rate of orders index jumped 11 points from -16.5 to -5.2.

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

Gassed: Are Energy-Rich Markets Losing Their Luster? via Multifamily Executive Magazine

When oil prices began falling earlier this year, Ryan ­Epstein's phone wouldn't stop ringing.

Epstein, executive vice president at Los Angeles–based real estate services firm CBRE, was answering calls for two different groups of apartment owners: those looking to buy distressed properties and those who were worried about their portfolios.

"Everyone was very concerned because it was happening so fast," he says. "They wanted to know what would be the fallout from it and were there going to be mass layoffs—how was it all going to work?"

Read more...Gassed: Are Energy-Rich Markets Losing Their Luster? | Multifamily Executive Magazine

Friday, July 24, 2015

MF Execs See Tighter Debt Conditions via

One metric that stands out strongly in the latest National Multifamily Housing Council Quarterly Survey of Apartment Market Conditions is respondents’ view of multifamily mortgage borrowing. Put simply, it’s considerably dimmer than it was three months ago.

NMHC said Thursday that the survey’s debt financing index declined significantly from 60 in late April to 35 now. A reading below 50 indicates that borrowing conditions are worsening; the council says this is the first time the debt financing index has fallen below 50 since January 2014.

Just 8% of respondents said that borrowing conditions have improved, compared to 32% who said this last time. Conversely, 38% said borrowing conditions have worsened, compared to 12% who gave this response in April.

Read more...MF Execs See Tighter Debt Conditions - Daily News Article -

Thursday, July 23, 2015

Houston leads nation in apartment growth via Real Estate Center at Texas A&M

Multifamily permitting activity continues to grow in the city despite an apparent slowdown in the market, according to a new national report.

The Houston metropolitan area ranked No. 2 nationally for the number of apartment permits issued over the past 12 months trailing May, according to Axiometrics Inc., a Dallas-based multifamily research company.

Houston-area developers received permits for 23,340 multifamily units in the 12 months trailing May, a 21 percent increase from the previous year.

Read more...Houston leads nation in apartment growth via Real Estate Center at Texas A&M

Forgotten Buyers via The Balance Sheet - Yardi Corporate Blog

A seemingly healthy economy, rising rent rates and a limited inventory of existing homes are pushing some buyers into the new homes market. Interestingly, they have few options once they arrive; new home construction is largely targeted towards mid- to high-price tier properties. First-time buyers are in limbo, adding uncertainty to an already imbalanced market.

Census Bureau data reports year-over-year prices of new home sales have risen above the May 2014 estimate. Price trends indicate above average emphasis on move-ups and luxury home sales. In May 2014, the average price of homes sold was $323,500. The May 2015, the average sales price came in at $337,000.

Read more...Forgotten Buyers | The Balance Sheet - Yardi Corporate Blog

Examining the Apartment Renewal Rent Growth Leaderboard via Property Management Insider

The apartment industry traditionally measures rent growth only by sticker prices for new leases. Yet renewals typically comprise half the rent roll, and are equally critical to performance. Which markets achieved the largest rent hikes on renewed leases in June 2015?

Watch video...Examining the Apartment Renewal Rent Growth Leaderboard | Property Management Insider

Wednesday, July 22, 2015

Texas Still Pumping Out Jobs via Real Estate Center at Texas A&M

Despite lower oil prices, the Texas economy continues to create more jobs. The state’s economy gained 276,400 nonagricultural jobs from June 2014 to June 2015, an annual growth rate of 2.4 percent compared with 2.1 percent for the United States.

According to the Real Estate Center’s latest Monthly Review of the Texas Economy, the nongovernment sector added 253,900 jobs, an annual growth rate of 2.6 percent compared with 2.4 percent for the nation’s private sector.

Texas’ seasonally adjusted unemployment rate fell to 4.2 percent last month from 5 percent a year ago. The nation’s rate decreased from 6.1 to 5.3 percent.

Read more...Texas Still Pumping Out Jobs via Real Estate Center at Texas A&M

Ruling on Disparate Impact Opens the Door for More Claims and Cases via Property Management Insider

The Supreme Court’s landmark decision on whether the Fair Housing Act supports the concept of disparate impact in housing discrimination cases is likely to open Pandora’s Box. The 5-4 ruling in June means a run on new and pending claims, housing industry experts say.

In an attempt to clarify a long-standing issue, the high court ruled that someone can be liable without intent to discriminate in Texas Department of Housing and Community Development v. The Inclusive Communities Project, Inc. In the decision, the justices agreed that “recognition of disparate-impact claims is consistent with the FHA’s central purpose, and that “unlawful practices include zoning laws and other housing restrictions that function unfairly to exclude minorities from certain neighborhoods without any sufficient justification.”

Read more...Ruling on Disparate Impact Opens the Door for More Claims and Cases | Property Management Insider

Apts. Continue Run of Rent Growth via

Apartments continued a five-month streak of rent growth exceeding 5% in June, the longest such run in at least six years, according to Axiometrics. June’s figure of 5.11% was the highest in 47 months, edging out April and February’s figures by a decimal point.

“Rent growth is just shy of the post-recession peak, and the June metrics reflect the continued strength of the apartment market,” says Stephanie McCleskey, VP of research at Dallas-based Axiometrics. “The demand for apartments is still strong, despite the record number of new units being delivered this year.”

Read more...Apts. Continue Run of Rent Growth - Daily News Article -

Boomers Competing With Millennials for U.S. Urban Rental Housing via Bloomberg Business

Mike Abelson calls it his “man cave.”

After his wife passed away, the 65-year-old sold his house and began renting a 1,400-square foot apartment eight miles away in Bethesda, Maryland. The trial attorney now uses his downtime to enjoy warm summer evenings on his terrace.

“I pay a pretty steep rent, but it’s worth it,” Abelson said. “I don’t pay property taxes, I don’t pay for maintenance, plumbing or electrical. I don’t have to pay for the grass cutting. It’s just easier than being a homeowner.”

The number of renters who are 65 or older will reach 12.2 million by 2030, more than double the level in 2010, according to research by the Urban Institute in Washington.

Read more...Boomers Competing With Millennials for U.S. Urban Rental Housing - Bloomberg Business

Friday, July 17, 2015

Housing Starts in U.S. Surge to Second-Highest Level Since 2007 via Bloomberg Business

New-home construction in the U.S. climbed in June to the second-highest level since November 2007 as builders stepped up work on apartment projects.

Housing starts rose 9.8 percent to a 1.17 million annualized rate from a revised 1.07 million in May that was stronger than previously estimated, figures from the Commerce Department showed Friday in Washington. The median estimate of economists surveyed by Bloomberg was a 1.11 million rate. Ground-breaking on multifamily dwellings jumped 29.4 percent.

Read more...Housing Starts in U.S. Surge to Second-Highest Level Since 2007 - Bloomberg Business

Apartment Market Maintains Surge in June with Effective Rent Growth at 47-Month High via

June 2015's national annual effective rent growth rate of 5.1% represented a 47-month high for the national apartment market and continued a streak of 5.0%-plus rent growth that is the longest in at least six years, according to Axiometrics, the leader in apartment and student housing research and analysis.

Though effective rent growth was also 5.1% in April and February, the June rate was the highest when extended to two decimal points (5.11%), and is the highest rate since the 5.3% of July 2011.

Effective rent growth has reached at least 5.0% for five straight months, the longest such streak since Axiometrics started monthly reporting of annual apartment data in April 2009.

Read more..Apartment Market Maintains Surge in June with Effective Rent Growth at 47-Month High |

Wednesday, July 15, 2015

Dallas Beige Book July 15, 2015 via Dallas Fed

The Eleventh District economy grew at a moderate pace over the past six weeks. Manufacturers mostly reported steady or weaker demand. Retail sales increased and auto sales were generally strong. Demand for nonfinancial services held steady or improved, and real estate activity generally remained solid. Loan demand rose slightly, and demand for oil field services held steady. Continued rainfall further improved agricultural conditions. Price pressures remained subdued and employment held steady or increased. Outlooks were mostly positive, except in the energy sector where they were negative.

Read more...Dallas Beige Book - Dallas Fed

Berkadia: Houston multifamily submarkets 1Q 2015 via Real Estate Center at Texas A&M

Developers moved to capitalize on the heightened rental demand by filing permits for 5,600 multifamily units in first quarter 2015, outpacing the 4,920 units requested during the same time last year.

Meanwhile, single-family activity was up 3.5 percent from the year before with 9,290 permits filed in 1Q 2015.

Read more...Berkadia: Houston multifamily submarkets 1Q 2015 via Real Estate Center

ALN Monthly Newsletter July 2015 via ALN Apartment Data

ALN Data just released their June 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 July 2015 via ALN Apartment Data

U.S. Commercial Sectors Enjoy Continued Momentum in Q2 via WORLD PROPERTY JOURNAL

According to CBRE, the U.S. commercial real estate market continued to exhibit strong momentum across all property types in the second quarter of 2015.

CBRE reports that during Q2:

The office vacancy rate dropped 40 basis points (bps) to 13.5%, now at lowest point since Q3 2008 (13.2%).

In Q2 2015, the industrial availability rate dropped 30 bps to 9.8%--matching the cyclical low achieved in Q4 2007.

The retail availability rate dropped 10 bps, ending the quarter at 11.4%.

Demand for the nation's apartment buildings continued to grow with vacancy dropping to 4.3% in Q2 2015.

Read more...U.S. Commercial Sectors Enjoy Continued Momentum in Q2 - WORLD PROPERTY JOURNAL Global News Center

Austin submarket vacancy/rent comparisons 1Q 2015 via Real Estate Center at Texas A&M

Construction was completed on 2,390 multifamily units in the last three months, 15.5 percent more deliveries than the preceding quarter, according to Berkadia’s Austin Multifamily first quarter 2015 report.

Rental demand heightened with 2,780 newly occupied apartments in the first quarter, up from 1,190 units absorbed in the preceding three months. A combined 8,760 units were absorbed in the last year.

Read more...Austin submarket vacancy/rent comparisons 1Q 2015

Friday, July 10, 2015

Sector Booms, But . . .via Axiometrics

The apartment sector is performing at historically strong levels, especially in the Dallas-Fort Worth area. But can it last? This was the topic discussion of the day at Bisnow's "Dallas Multifamily Boom: What's Next?" conference on June 23. With annual effective rent growth at 6% and the occupancy rate topping 95.5%, according to Axiometrics’ apartment market research, DFW is proving to be a resounding success story, thanks to an expanding population and upward-trending job growth.

“Job growth, nationally, is better than at any point since 1999,” said Axiometrics Senior Vice President Jay Denton, the conference keynote speaker. As job growth helps spur housing demand, this is good news. But all is not rosy; Denton also said new supply could put a damper on the boom, especially in DFW.

Read more...Sector Booms, But . . .

Houston Economic Indicators July 2015 via Dallas Fed

After its sharpest contraction since 2009, the Houston Business Cycle Index returned to positive growth in May. The 2.5 percent annualized growth was the strongest reading of the year. Growth in the index was mostly due to a strong improvement in job growth in May. Oil and gas production industries continue to be a drag on the region, but refining, petrochemicals and service industries are managing to offset oil-producer woes. On balance, the Houston region outlook remains weak.

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

Does Wage Growth Cover MF Rent Growth? via

Apartment rents have grown faster on an annual basis than wages, says Axiometrics. Have wages grown enough to cover rent increases? A look at the numbers suggests that they have.

“The continued strength in the apartment market can be partially attributed to the increase in wages during the past several years,” according to an Axiometrics report. “Though wages have been slow to rise during the recovery, they have increased enough in recent years to allow more people to rent more expensive apartments.”

Read more...Does Wage Growth Cover MF Rent Growth? - Daily News Article -

Austin Economic Indicators July 2015 via Dallas Fed

The Austin economy continued to grow strongly in May. Job growth picked up to a 6.6 percent annualized rate, triple the state rate of 2.1 percent. The unemployment rate further declined to a postrecession low of 3.2 percent. Economic activity in Austin has continued to outpace that of other major metropolitan areas in Texas. A lesser dependency on the energy sector has insulated it from much of the weakness impacting the rest of the state, while industries such as hospitality have expanded robustly.

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

Older Adults Take Charge in Multifamily via

The millennial generation has been generally regarded as the cohort in the driver’s seat when it comes to present and future multifamily demand. However, reports from the Kansas City Federal Reserve and others suggest that baby boomers and their requirements will hold at least as much sway as today’s twenty- and thirty-somethings.

While demand from renters born between 1980 and 2000 has recovered to levels last seen prior to the downturn, the report from Kansas City Fed senior economist Jordan Rappaport finds that older Americans are “increasingly downsizing” to apartments. This switch generally begins at around age 70 and becomes more common by age 75, Rappaport writes. The oldest of the baby boomers, the generation born between 1946 and 1964, will turn 70 in 2016.

Read more...Older Adults Take Charge in Multifamily - Daily News Article -

Friday, July 3, 2015

Reis: Apartment Vacancy Rate unchanged in Q2 at 4.2% via Calculated Risk

Reis reported that the apartment vacancy rate was unchanged in Q2 2015, compared to Q1, at 4.2% - and also the same as in Q2 2014. The vacancy rate peaked at 8.0% at the end of 2009.

A few comments from Reis Senior Economist and Director of Research Ryan Severino:

Vacancy was unchanged at 4.2% during the quarter with construction and net absorption effectively in balance. Vacancy is cyclical and moves in long phases. For most of the last five years, the market has been in a vacancy compression phase, falling from 8% at the start of 2010 before bottoming out at 4.2% during the first quarter of last year.

Read more...Calculated Risk: Reis: Apartment Vacancy Rate unchanged in Q2 at 4.2%

Thursday, July 2, 2015

Matrix Monthly Reports Rent Growth Acceleration in June via Multi-Housing News Online

The June 2015 edition of Matrix Monthly, a report on U.S. apartment market trends from Yardi®, documents a robust 6.3 percent year-over-year increase in average rents across the country. Rents rose by 1.3 percent month-over-month in June, the largest increase since the last recession, and are now at an all-time high of $1,150.

Continued rent escalation in San Francisco, Denver, Jacksonville, Fla., and Portland, Ore., accounted for much of the average rent increase in June. Demand for higher-end product also contributed to this trend.

Read more...Matrix Monthly Reports Rent Growth Acceleration in June | Multi-Housing News Online

Apt. Rent Growth Hits Four-Year High via

Annual quarterly effective rent growth for US apartments reached 5.0% for the first time in four years, says Axiometrics. As a further indicator of multifamily’s ongoing strength, all of the top 50 markets tracked by the Dallas-based research and analysis firm showed positive quarterly effective rent growth in the second quarter, compared to 36 markets in Q1 of this year and 14 markets in Q4 of 2014.

“We’ve been seeing steady 5% rent growth in our monthly reporting, so the quarterly number is right on track,” says Stephanie McCleskey, VP of research at Axiometrics. She adds that Q2 is traditionally strong for apartment rent growth, “as school has ended and weather is warmer.” The quarter-over-quarter rent growth of 2.7% was equal to the figure Axiometrics reported the year prior, and a big step up from the 0.9% growth recorded in Q1.

Read more...Apt. Rent Growth Hits Four-Year High - Daily News Article -

Are Multi-Family Housing Starts near a peak? via Calculated Risk

I'm wondering if multi-family housing starts are near a peak. The architecture billings index for multi-family residential market was negative for the fourth consecutive month, and that suggests a slowdown for new apartment construction later this year.

That doesn't mean apartment construction will slow sharply, especially since demographics are still favorable for apartments (as discussed below). But multi-family construction might move sideways.

However the NMHC Market Tightness Index was still favorable for apartments in Q1, but not as favorable as a few years ago.

Read more...Calculated Risk: Are Multi-Family Housing Starts near a peak?

D-FW apartment leasing, construction and rents jump in second quarter via Dallas Morning News

North Texas apartment leasing more than doubled in the second quarter from the first three months of 2015.

Net leasing totaled 7,881 apartments. And 11,429 units were leased in the first half of the year – up 26 percent from the same period in 2014, according to just-released numbers from MPF Research.

“Demand is still coming in at huge volumes, surpassing the sizable completions,” MPF Research vice president Greg Willett said. “In turn, occupancy remains tight, close to the all-time high, and rent growth is proceeding at record levels.”

Read more...D-FW apartment leasing, construction and rents jump in second quarter | | Dallas Morning News