Thursday, December 31, 2015

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

Wednesday, December 30, 2015

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

Wednesday, December 23, 2015

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

Tuesday, December 22, 2015

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

Monday, December 21, 2015

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

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 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 -

Opposing Perspectives Drives Multifamily Activity via

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 -

Wednesday, December 16, 2015

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

Tuesday, December 15, 2015

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

Monday, December 14, 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

Wednesday, December 9, 2015

Boomers Will Drive Apt. Growth via

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 -

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

Monday, December 7, 2015

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

Friday, December 4, 2015

MF Rent Growth Remains Flat via

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 -

Thursday, December 3, 2015

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

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 -

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