Tuesday, March 29, 2016

Can Apt. Supply Meet the Coming Demand? via GlobeSt.com

Harvard University’s annual study of rental housing was on the industry’s radar again this past week, as Lloyd Jones Capital CEO Chris Finlay sent out an open letter via email, summarizing his impressions of the study. Originally published this past December, the study from Harvard’s Joint Center for Housing Studies notes that renter households now number nearly 43 million out of 116 million US households.

“Renters now represent 37% of all households, the highest number since the mid-1960s,” Finlay writes. “That’s a lot of renters, and they need decent housing.”

Whether the supply of decent housing will be there to meet the demand is another matter.

Read more...Can Apt. Supply Meet the Coming Demand? | GlobeSt.com

Dallas-area apartment dwellers set new record with average rent over $1,000 via Dallas Morning News

Apartment renters are entering new territory in the Dallas area, paying higher rents than ever before.

In February, rents were $1,083, according to research firm Axiometrics. That’s an average of $58 more a month and almost 6 percent more than a year earlier.

In the Fort Worth area, rents averaged $974.

Read more...Dallas-area apartment dwellers set new record with average rent over $1,000 | | Dallas Morning News

Wednesday, March 23, 2016

Apt. Renewals Reach 10-Year High via GlobeSt.com

February’s renewal rate among apartment tenants was the highest nationally in 10-years, MPF Research says. The increasing renewal rate, with 55.1% of renters choosing to re-up last month, comes even as rents continue increasing and more new product becomes available.

Tenants who chose to renew their expiring leases in February saw an average rent increase of 5%, according to MPF, which analyzed lease transaction data from parent company RealPage Inc. “We continue to see no evidence of affordability concerns among renters of market-rate, professionally managed apartments,” says Jay Parsons, VP of MPF Research. “Renters are increasingly choosing to renew their leases and are paying a premium to do so.”

Read more...Apt. Renewals Reach 10-Year High | GlobeSt.com

Tuesday, March 22, 2016

Millennials: Delaying the Move from Gotham to Mayberry via NREI.com

There has been a flurry of news reports recently touting the droves of Millennials flocking to the suburbs. Although this may make for a great headline, the message is not representative of what is actually occurring within the housing market.

First, the cited survey by the National Association of Realtors (NAR) focuses on Millennial homebuyers, not migration patterns of Millennials, which includes buyers and renters—these are two very different subjects. Second, the key point in the survey’s first paragraph indicates that when Millennials do buy a home, they are buying outside of the central city. This is not news, but is expected, given central city pricing and substandard city schools. The article is not making the point that all Millennials are moving to the burbs in droves.

As it relates to Millennials moving into and out of the city/suburbs (both renters and buyers):

Read more...Millennials: Delaying the Move from Gotham to Mayberry

Are Apartment Renters Willing to Pay More for Green Features? NREI.com

It’s hard to prove that renters are willing to pay more to live in “sustainably developed” apartments—but circumstantial evidence that this is the case keeps piling up.

Renters now explicitly say they are willing to pay more to live in apartment buildings with sustainable design features, from energy-saving appliances to bike rooms, according to the latest survey from the National Multifamily Housing Council (NMHC). Renters are also willing to pay extra to live in “sustainable” neighborhoods, where they don’t have to drive to get to amenities like shopping and services, according to a February study from data firm Axiometrics.

Read more...Are Apartment Renters Willing to Pay More for Green Features?

Friday, March 18, 2016

San Antonio Economic Update March 2016 via Dallas Fed

The San Antonio economy expanded rapidly in January. Job growth picked up sharply, rising by more than double the state rate, while the metropolitan unemployment rate fell for a second consecutive month. In 2015, San Antonio benefited from a pickup in government, leisure and hospitality, and health services growth, which cushioned the effects of a declining energy sector and a softening state economy.

Read more...San Antonio Economic Update March 2016 via Dallas Fed

Beyond Cap Rates via CCIM Institute

Capitalization rates for multifamily properties appear to have stabilized at very low levels after a veritable free-fall in major metropolitan markets since the end of the Great Recession. The drop in cap rates appears to be the result of low cost permanent financing, the perceived long-term stability of apartments as an asset class, and a lack of yield in other industry segments.

Investors purchase apartment projects in major markets as soon as they are listed - or in some cases before they are listed. The historically low interest rates provided by permanent lenders - Fannie Mae, Freddie Mac, conduits (until recently), and some local and regional banks - make acquisitions at high prices per unit and correspondingly low cap rates feasible. However, going-in cap rates tell only part of the story for long-term investors.

Read more...Beyond Cap Rates | CCIM Institute

Thursday, March 17, 2016

ALN Monthly Newsletter March 2016 via ALN Apartment Data

ALN Data just released their February 2016 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 March 2016 via ALN Apartment Data

Wednesday, March 16, 2016

Houston Economic Indicators March 2016 via Dallas Fed

Recent data suggest that Houston’s economy was slightly stronger than originally estimated in 2015. While the region is still struggling from a moribund oil and gas sector, services—particularly health and leisure and hospitality services—continue to be a source of growth. Taken together, the outlook remains tepid and uncertain.

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

Millennials Supporting Apartment Demand Growth via Commercial Property Executive

A new Fannie Mae commentary points to Millennials, rather than Baby Boomers, as the driving force behind recent multifamily demand growth.

The real driver of U.S. apartment demand in the years after the recession was Millennials, according to Patrick Simmons, who specializes in economic and strategic research at Fannie Mae. Not, as he pointed out, Baby Boomers. Simmons came to that conclusion after a detailed review of 2009 and 2014 American Community Survey data, and reported his findings recently in a Fannie Mae commentary called, “Housing Myths, Debunked: Millennials, Not Baby Boomers, Are the Driving Force Behind the Recent Surge in Apartment Demand.”

Read more...Millennials Supporting Apartment Demand Growth

Austin Economic Indicators March 2016 via Dallas Fed

The Austin economy continued to expand in January. The Austin Business-Cycle Index increased at a rapid pace, and job growth rose at a 2.7 percent annualized rate, slightly above that of the state. The unemployment rate declined for a second month, indicating continued local labor market tightness. In 2015, strong expansion in areas such as leisure and hospitality, technical services and construction fueled the fastest pace of job growth in Austin since 2006.

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

Thursday, March 10, 2016

How Water Conservation is Impacting the Apartment Industry via Property Management Insider

According to the National Oceanic and Atmospheric Association, the U.S. has made substantial progress against the drought that has persisted in recent years. In January, 71.2 percent of the contiguous U.S. had no drought, compared to 53.6 percent a year ago. Water reservoirs are back to normal or exceeding capacity in some parts.

Water conservation efforts in the apartment industry
So, is it time to let up on water restrictions and conservation efforts? No, say leaders of The Golden State. In fact, the first of more efforts to conserve water have gone into effect in California, a place with some big drought worries.

Read more...How Water Conservation is Impacting the Apartment Industry | Property Management Insider

Texas Economic Indicators March 2016 via Dallas Fed

The Texas economy expanded in January. Payroll employment increased during the month, and unemployment ticked down. The Texas Manufacturing Outlook Survey production index remained in negative territory. Fourth-quarter exports continued to decline, and the estimated value of the Texas Leading Index fell for the third straight month in January.

Read more...Texas Economic Indicators March 2016 via Dallas Fed

Texas Jobs Report: Jan 2016 via Dallas Morning News

Texas employers added a surprisingly strong 31,400 jobs in January, the 10th consecutive month of job growth in a state with regions shaken by a collapse in oil prices. The state’s jobless rate fell to 4.5 percent, down from a revised 4.6 percent in December and below the national rate of 4.9 percent. “I’m quite surprised that we aren’t seeing more stress from lower oil prices,” said Robert A. Dye, chief economist at Comerica Bank in Dallas. Over the past 12 months, Texas has added 187,400 jobs.

Read more...Texas Jobs Report: Jan 2016

Demographics: Renting vs. Owning via Calculated Risk

Note; This is an update to a post I wrote last year.

It was six 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.

The drivers in 2011 were 1) very low new supply, and 2) strong demand (favorable demographics, and people moving from owning to renting).

Read more...Calculated Risk: Demographics: Renting vs. Owning

DFW Economic Indicators March 2016 via Dallas Fed

The Dallas–Fort Worth economy continued to expand, albeit at a slow pace in January. DFW office and industrial markets remained strong at year-end 2015. Unemployment in January edged down in both Dallas and Fort Worth, reflecting further tightness in the labor market. Dallas Fed business-cycle indexes point to continued growth for the metroplex.

Read more...DFW Economic Indicators March 2016 via Dallas Fed

Yardi Matrix: Multifamily Rents Steady in February via CPExecutive.com

Rents made a solid increase in the past month, increasing $7 to an average national rental rate of $1,175, an all-time high, according to Yardi Matrix’s most recent Matrix Monthly report. This figure replaced January’s peak of $1,168. On a year-over-year basis, rents were up 5.9 percent in February, which is 6.4 percent less than a month earlier. The 50-basis-point decrease is not likely cause for concern, as the report chalks this up to the exceptionally strong numbers of February 2015 and the predicted moderation of rent growth this year. “Even though the year-over-year declined 50 basis points, February was still a pretty good month and we’re still seeing good rent increases. The reason it declined is because last February was even better,” said Paul Fiorilla, editorial director of Yardi Matrix.

Read more...Yardi Matrix: Multifamily Rents Steady in February

Friday, March 4, 2016

MPF Research reports weakening of Houston's Multifamily market amid oil slump via Houston Business Journal

A multifamily research firm reports Houston’s apartment market is showing “significant signs of weakening” amid the oil slump and supply of new projects.

MPF Research released a new report that looked at Houston apartment data from RealPage, a property management software. The Carrollton, Texas-based company found that while market surveys of apartment rents continue to show rent growth, leasing data points toward a market slowdown.

Read more...MPF Research reports weakening of Houston's multifamily market amid oil slump - Houston Business Journal