Energy saver: Dallas, San Antonio and Austin keep Texas growing via Dallas Morning News

Call it the I-35 firewall, because it’s the best defense against a big downturn in the Texas economy.

Three major metros along the interstate corridor — Dallas, Austin and San Antonio — keep adding jobs even as oil prices plunge. And their gains may be enough to offset the energy shock.

At least they were last year, and that’s likely to continue, said Rob Kaplan, the new president of the Federal Reserve Bank of Dallas.

Read more...Energy saver: Dallas, San Antonio and Austin keep Texas growing | Dallas Morning News

Multifamily Finance News via Capital One Multifamily

A Tale of Two Cities: The Urban v Suburban Analysis

The multifamily sector has had a stellar year in 2015, delighting both investors and developers. The metrics tell the story; according to Axiometrics, the apartment research firm, the national annual effective rent growth in November stood at 4.6%, while occupancy was 95%.

Digging deeper, it is clear, however, that urban markets are underperforming their suburban counterparts. Axiometrics’ figures put annual effective rent growth in urban markets at 2.7%, and occupancy at 95%. By comparison, the rent growth in suburban markets was 5.2%, and occupancy was also 95%.

But the urban-suburban differential isn’t the same in all markets.

Read more...Capital One Multifamily News | Capital One Multifamily

Zillow: Skyrocketing DFW apartment rents expected to slow in 2016 via Dallas Business Journal

With apartment rents in Dallas-Fort Worth growing 6 percent — more in certain submarkets — in 2015, Seattle-based Zillow Chief Economist Svenja Gudell said she expects the rise in apartment rents to slow in 2016.

"The pace in which rent is appreciating will decline and rents will continue rising, but at a slower rate," Gudell told the Dallas Business Journal.

In Dallas, apartment rents are expected to grow 2.1 percent from December 2015 to December 2016, which would mean the metro area's median rent is expected to increase from $1,500 per month to $1,532 per month.

Read more...Zillow: Skyrocketing DFW apartment rents expected to slow in 2016 - Dallas Business Journal

Renting to Millennials via The Balance Sheet - Yardi Corporate Blog

You know all of those reports on Millennials and their love for tiny, urban spaces in walkable communities? They might be wrong. It turns out that Millennials value space and authenticity more than we previously believed—and the two rarely go hand-in-hand.

A recent study suggests that while Millennials do enjoy their apartments in urban environments, they’re willing to leave rentals behind for more spacious accommodations. The BUILDER Responsive Home project reveals that young adults enjoy the amenities that urban living provides, but they crave more space. Of the participants surveyed, 83 percent said more space is the biggest motivator to purchase a home. Unfortunately, 61 percent admit that they cannot afford a home.

Read more...Renting to Millennials | The Balance Sheet - Yardi Corporate Blog

State of Texas adds 24,900 jobs in December; DFW jobless rate falls to 3.7% via Dallas Business Journal

The state of Texas added 24,900 seasonally adjusted nonfarm jobs in December, the 10th straight month of job increases in the state, according to the Texas Workforce Commission.

That was the good news. The bad news is that the state’s unemployment rate rose to 4.7 percent, up from 4.6 percent in November. That’s still below the national average of 5 percent.

Read more...State of Texas adds 24,900 jobs in December; DFW jobless rate falls to 3.7 percent - Dallas Business Journal

A Great Time To Be in Apartments via Multi-Housing News Online

Overdevelopment? Affordability? Rising capitalization rates? An economic downturn? Falling stock market prices?

Bring it on, the multifamily market can handle it this year.

At least that seemed to be the consensus at the National Multifamily Housing Council’s annual meeting, held this week in Orlando. Panelists at the conference’s Apartment Strategies Outlook event were generally bullish on the outlook for the sector in 2016.

Read more...A Great Time To Be in Apartments

Photo Gallery: Where Are the Most Overbuilt Apartment Submarkets? via National Real Estate Investor

Developers Concentrate Downtown

Building cranes cluster over central business districts (CBDs) in cities across the country. Many of the most overbuilt submarkets for apartment properties are in downtown areas and secondary business districts. The percentage of vacant apartments is rising sharply in some of these markets, though developers hope strong demand will eventually fill their empty units.

Read more...Photo Gallery: Where Are the Most Overbuilt Apartment Submarkets? | National Real Estate Investor

“Fiery” rental construction to cool via Dallas Morning News

The apartment building boom will lose some steam in 2016.

Apartment starts this year will be up only modestly or could be flat after several years of sharp gains.

In 2014, nationwide apartment starts rose 14 percent, and they were up 12 percent last year.

“2016, I think, will be only about 5 percent above 2015,” David Crowe, chief economist with the National Association of Home Builders, said Wednesday at the housing industry’s annual meeting in Las Vegas. “I am seeing a bit of tempering in these raging increases.

Read more...“Fiery” rental construction to cool | Dallas Morning News

Yardi Matrix Predicts Strong 2016 for Multifamily via Commercial Property Executive

Yardi Matrix's Winter 2016 Outlook reports predicts another strong, yet less-volatile, year for the apartment market.

As the New Year comes into full swing, many real estate professionals are looking ahead to what the market has in store for the future. While the apartment market has enjoyed considerable rent growth over the past few years, the peak 6 percent growth rate just isn’t sustainable long-term. However, Yardi Matrix, Yardi’s multifamily data provider, predicts that 2016 will be strong year for rent growth despite the forecasted deceleration in its newest report, “The 2016 Winter Outlook.”

Read more...Yardi Matrix Predicts Strong 2016 for Multifamily

Houston Economic Indicators January 2016 via Dallas Fed

Houston is treading water as oil-related losses abate and the region gets help from health, construction, and refining and petrochemicals. The outlook remains very soft.

The Houston Business-Cycle Index growth rate declined to 0.8 percent from October to November after climbing to 4.7 percent the prior month as the region’s economy continues to drift sideways. This marks the sixth month of negative growth in 2015, but those declines have not been consistent enough to indicate a regional recession

Read more...Houston Economic Indicators January 2016 via Dallas Fed

ALN Monthly Newsletter January 2016 via ALN Apartment Data

ALN Data just released their December 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 January 2016 via ALN Apartment Data

Dallas Beige Book 1/13/2016 via Dallas Fed

The Eleventh District economy grew at a modest pace over the last six weeks. Most respondents in manufacturing reported that demand either held steady or increased. Demand for nonfinancial services was mixed. Auto sales held steady, while retail spending moderated. Housing demand softened due to seasonal factors, and apartment, office and industrial leasing activity generally remained solid, except for continued 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

U.S. Apartment Market Notches Sixth Straight Year of Strong Rent Growth via Property Management Insider

Demand continued to outpace supply, vacancies shrunk and rent growth levels accelerated above 2014 levels – as 2015 will go down in the books as one of the best ever for the U.S. apartment sector.

Watch video...U.S. Apartment Market Notches Sixth Straight Year of Strong Rent Growth | Property Management Insider

Stagnant Homeownership Rate Likely Means Decades of Strong Demand for Apartments via NREI

Over the next two decades, demand for rental apartments will likely continue to be strong, if current homeownership rates remain where they are or improve only modestly.

The homeownership rate and how low it will remain going forward is one of the biggest questions hanging over the apartment market. As the rate continues to drop, more households move into rental housing, keeping apartment rent growth high and vacancy rates low. Experts disagree on whether the homeownership rate will continue to fall as it has since the housing boom, or stabilize and even modestly recover. Any of these potential outcomes, however, should still be enough to produce strong demand for rental apartment units not just in the next few years, but through the next decade and beyond.

Read more...Stagnant Homeownership Rate Likely Means Decades of Strong Demand for Apartments

Is MF in Seventh Inning, Will it Go Extra Innings? via GlobeSt.com

To sum up results from its recent RealShare Apartments survey, Grace Huebscher, president of Capital One Multifamily Finance, looks further into the future of the multifamily market, answering at one big question: “The Market Has Legs—But How Long Are They?”

She says that “Taking everything we heard from survey participants and conference panelists, we conclude that market sentiment expects the multifamily sector to do well at least until 2018.”

Read more...Is MF in Seventh Inning, Will it Go Extra Innings? - Daily News Article - GlobeSt.com

MF Rent Growth Set to Moderate via GlobeSt.com

2016 promises to be another year of above-average rent growth in apartments, just not at the accelerated pace the sector has experienced for the past couple of years. Yardi Matrix is predicting “solid” increases for the year, “without the froth of 2015.”

Specifically, the latest Yardi Matrix report projects 4.6% rent growth nationally this year, “led by many of the hot markets that produced outsize increases in 2015.” Although the forecast represents a deceleration from the 6.5% gain recorded in the year just past, “rent growth will, nonetheless, outpace the eight-year average of 2.8%, satisfying most property owners.”

Read more...MF Rent Growth Set to Moderate - Daily News Article - GlobeSt.com

U.S. Apartment Rents Decline in Fourth Quarter, Bucking Annual Trend via CoStar Group

In a surprise finding to the end of the year, U.S. apartment rents posted one of the weakest fourth quarters since the end of the most recent recession, according to the latest analysis of the U.S. multifamily market by CoStar Group.

In the first six months of 2015, U.S. apartment rents grew at an annualized rate of 9.4%, per CoStar’s same-store analysis of more than 50 million rent observations. The growth rate slowed to just 2.7% in the second half of 2015, and turned negative over the final three months of the year. Taken together for the full year, U.S. apartment rents grew by an average of 6% in 2015

Read more...U.S. Apartment Rents Decline in Fourth Quarter, Bucking Annual Trend - CoStar Group

Austin Economic Indicators January 2016 via Dallas Fed

Austin economic growth was strong in November. The Austin Business-Cycle Index continued to grow above trend, while jobs climbed at a rapid 4.6 percent annualized rate. The unemployment rate remained flat at a low level. Despite significant headwinds in manufacturing and continued mild growth in the state economy, most of Austin’s large service sectors have continued to expand at a healthy pace.

Read more...Austin Economic Indicators January 2016 via Dallas Fed

Renting ‘Could Be’ New Normal via GlobeSt.com

“It’s not clear that renting is the new normal, but it could be,” Doug Bibby, president of the National Multifamily Housing Council, told a webinar audience earlier this week. Further, Bibby said, “household formation currently favors our sector.”

Bibby was the lead-off presenter in the seventh annual webinar presented by Humphreys & Partners Architects. The one-hour presentation covered apartment market demographics, the development pipeline, trends in occupancy and rent growth, and construction costs.

Read more...Renting ‘Could Be’ New Normal - Daily News Article - GlobeSt.com

Why The Apartment Cycle Is Good For Five More Years via GlobeSt.com

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.

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

Will Younger Demographic Make Rent Growth Implode? via GlobeSt.com

In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. In the first part of this series, we talked about whether or not apartment vacancy will tick upward in 2016. In part two of the series, we reviewed whether or not the market could digest the new supply pipeline. In this part of the series, we talk about rent growth, demand, and whether or not we can expect it to implode in the coming years.

GlobeSt.com: Do you expect rent growth to continue? How about demand? Is it likely to implode in the coming years due to the number of 20 to 29 years olds, which still constitute the bulk of the prime rental cohort?

Read more...Will Younger Demographic Make Rent Growth Implode? - Daily News Article - GlobeSt.com

Finance Forecast for 2016 via Multi Housing News

Even as 2016 is shaping up to be the best of times for most multifamily markets, there are some markets that will likely lag. With U.S. multifamily continuing to be a globally sought-after asset class, investor demand will stay strong. This bodes well for most multifamily markets.

According to Steve Guggenmos, Freddie Mac’s director of multifamily research and modeling, “Our forecast is that there will be continued strength in the market. We see vacancy rates going from somewhere in the range of 4.5 percent at the end of 2015 to maybe 4.9 percent at the end of 2016, with new supply. But that continues to be lower than the long-run average. And we expect that rent growth will be consistent with a strong occupancy environment.”

Read more...Finance Forecast for 2016

Reis: Apartment Vacancy Rate increased in Q4 to 4.4% via Calculated Risk

Reis reported that the apartment vacancy rate increased in Q4 2015 to 4.4%, up from 4.3% in Q3, and up from 4.3% in Q4 2014. The vacancy rate peaked at 8.0% at the end of 2009, and appears to have bottomed at 4.2%.

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

Read more...Calculated Risk: Reis: Apartment Vacancy Rate increased in Q4 to 4.4%

Red Hot Apartment Market Generates Highest Year-End Annual Effective Rent Growth Since 2005 via MultifamilyBiz.com

An exceptional first three quarters of 2015 sparked the national apartment market to its strongest year in a decade, according to early fourth-quarter/year-end apartment data from Axiometrics, the leader in apartment market and student housing research and analysis.

Axiometrics' research showed:

Annual effective rent growth of 4.7% in the fourth quarter of 2015 represented a 7-basis-point (bps) increase from the figure of one year earlier (also rounded to 4.7%), though it was 35 bps lower than the 5.2% of the third quarter of 2015. The fourth-quarter rate is the highest year-end figure since 2005, when effective rent growth was 5.8%.

Read mmore...Red Hot Apartment Market Generates Highest Year-End Annual Effective Rent Growth Since 2005 | MultifamilyBiz.com:



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MF Continues Rent Growth Streak via GlobeSt.com

If the proof of the pudding is in the eating, as the old expression has it, then the proof of a property sector’s strength is in its metrics. On that score, investors’ confidence in multifamily continues to be justified, with both Yardi and MPF Research reporting year-over-year gains in apartment rents and occupancy.

Yardi Matrix data released Wednesday showed that rents rose in 2015 by an average of 6.4% across the 111 metro areas it tracks. That national average represents the second highest increase over the past decade and 190 basis points more than the 4.5% recorded in 2014, according to the December 2015 edition of Matrix Monthly. It’s the case even as December rents were basically flat, as they have been for the past four months.

Read more...MF Continues Rent Growth Streak - Daily News Article - GlobeSt.com

Limited Upward Momentum for Interest, Cap Rates via GlobeSt.com

Capital One’s survey at RealShare Apartments West always produces intriguing insights about market performance. Generally speaking, the cross section of participants felt that the market still has several high-volume years ahead of it.

But as SVP Kristen Croxton, co-head of the firm’s Newport Beach office, points out in part two of the firm’s four-part analysis from the conference, participants and panelists didn’t express much confidence of interest rates or cap rates increasing substantially. “The market winners will be those with a strategy to succeed given these conditions.”

Read more...Limited Upward Momentum for Interest, Cap Rates - Daily News Article - GlobeSt.com

Axiometrics: DFW's apartment market one of the top in the U.S. via Dallas Business Journal

Dallas-Fort Worth's apartment market was one of the top regions in the U.S. based on rising annual effective rent growth in 2015, a year that had the highest annual growth in a decade.

The first three quarters of 2015 proved the most robust since 2005 before the Great Recession, said Jay Denton, senior vice president of analytics for Addison-based Axiometrics, which tracks and analyzes the apartment market.

Read more...Addison-based Axiometrics: DFW's apartment market one of the top in the U.S. - Dallas Business Journal

Will Apartment Vacancy Tick Upward in 2016? via GlobeSt.com

In preparation for the multifamily quarterly feature in Real Estate Forum magazine, we sat down with many multifamily experts from around the country. On particular topic on the agenda was apartment vacancy and whether or not it will tick upward. While it is happening in some markets, there are dozens where the opposite is true, said sources. See the below commentary for more on the subject.

GlobeSt.com: A recent report we read said apartment vacancy continues to tick upward. Is that something you are seeing and can we expect that going forward? Do you expect a faster upward pace in the coming months? Why or why not?

Read more...Will Apartment Vacancy Tick Upward in 2016? - Daily News Article - GlobeSt.com

D-FW apartment rents rose at record rate in 2015 via Dallas Morning News

Dallas-Fort Worth apartment rents jumped by more than 6 percent in 2015 –the largest such annual increase for the area.

“We had record calendar year performance for rent growth,” said Greg Willett, vice president with apartment analyst MPF Research.

The large average rent increases came as North Texas led the country in apartment leasing in 2015.

Read more...D-FW apartment rents rose at record rate in 2015 | | Dallas Morning News