As Expected, Multifamily Market Returning to Normal in 2018 via Property Management Insider

A year ago, the consensus among multifamily leaders was that 2017 would be a tale of a storybook market cooling its heels. By last fall, analysts observed that a slowdown was already underway and would continue into the next year.

Issues with affordability and funding loomed, as did price flattening due to a shake-up in the mix of demand and product supply. Developers would be forced into a more selective approach as lending tightened, they said.

Read more...As Expected, Multifamily Market Returning to Normal in 2018

Rents Catch Up with Incomes in Y-O-Y Growth via GlobeSt.com

Renters’ incomes had been growing faster than rent checks for the past year or so, but now the latter are catching up again. Zillow said Thursday that median rents for both apartments and single-family rentals grew 2.4% nationally for the 12 months that ended Nov. 30 to reach $1,435 per month, the highest median rent the firm has reported to date.

That’s nearly in line with the 2.5% annual growth in incomes during the same month, says Zillow senior economist Aaron Terrazas. November represents the first month since June 2016 in which rent growth increased at the same pace as incomes.

Read more...Rents Catch Up with Incomes in Y-O-Y Growth | GlobeSt.com

Will the Tax Bill Prove Too Much of a Good Thing for the CRE Industry? via National Real Estate Investor

In a first major legislative victory for the Republican Party since President Trump took office, the House and Senate have passed the Tax Cuts and Jobs Act. The $1.5 trillion bill marks the first major overhaul of the U.S. tax code since 1986 and is expected to be a great boon for commercial property owners. Industry analysts predict the new tax code will strengthen demand in the multifamily sector and spur corporations to put more money into real estate assets and new development, in addition to preserving or improving most of the existing tax breaks for real estate investors.

Read more...Will the Tax Bill Prove Too Much of a Good Thing for the CRE Industry? | National Real Estate Investor

Rental Homes Demand Is Starting To Ease via GlobeSt.com

The multifamily housing market has been exhibiting nothing but prolific growth over the past decade. Now as 2017 comes to a close it is becoming apparent that this growth is starting to slow, according to a report from the Joint Center for Housing Studies of Harvard University. As the dust settles from this era, it is also apparent that the rental housing market has changed considerably and perhaps permanently, the report concluded.

In short, the apartment market is settling into a “new normal” in which nearly 21 million households pay more than 30% of their income for rent.

Read more...Rental Homes Demand Is Starting To Ease | GlobeSt.com

Renting in Dallas: 2017 Year in Review via CandysDirt.com

A new report from Apartment List analyzes the top trends in the 2017 rental market and predicts their impacts in 2018. For example, the report highlights the increase in the homeownership rate after a decade of declines, as well as the decrease in the share of rental units considered affordable to the lowest-income renters. Although affordability remains a concern for those renting in Dallas, Dallas rent growth slowed as the metro added more new rental stock than any other U.S. metro. Dallas rents remain slightly lower than the national average, at $1,100 for a two-bedroom apartment, compared to $1,160 nationwide.

Read more...Renting in Dallas: 2017 Year in Review - CandysDirt.com

D-FW led the country in apartment building permits in October via Dallas News

Slowdown? What slowdown?

Apartment builders and analysts have been predicting a slowdown in new rental projects. Early this year it looked like starts were beginning to wane. But new numbers show that Dallas-Fort Worth apartment building has increased more than 14 percent this year.

Read more...D-FW led the country in apartment building permits in October | Real Estate | Dallas News

Multifamily Permits Are Plateauing via GlobeSt.com

On a metro area basis, a few individual cities in the top 10 markets for apartment permits posted impressive year-over-year gains in October. On the whole, though, permit totals are plateauing, says RealPage.

Citing Census Bureau data, RealPage says local governments across the country approved 416,000 apartment units in the year-ending Oct. 31. That permitting activity, including 40,087 units authorized during the month of October, represents a 13.4% increase over September’s annual volume—which was down 17.4% from the previous month—and a 12.2% decline from October 2016’s annual total.

Read more...Multifamily Permits Are Plateauing | GlobeSt.com

ALN Monthly Market Stats December 2017 via ALN Apartment Data

ALN Data just released their November 2017 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data. Check out their new website.

Read more...ALN Monthly Market Stats December 2017 via ALN Apartment Data

Public Housing Under Pressure via Housing Finance Magazine

Every year for more than a decade, the federal budget has provided much less than housing authorities need to manage and maintain their public housing properties. Across the country, public housing crumbles amid billions of dollars of deferred maintenance ranging from peeling paint to leaky roofs.

Federal officials also continue to pile on reporting and compliance mandates that don’t make sense for smaller housing authorities, which simply don’t have the staff to keep up.

And the most-recent proposed reform of the federal tax code might wipe out an important funding program that has—until now—helped many housing authorities repair their tattered buildings and improve their funding situation.

Read more...Public Housing Under Pressure| Housing Finance Magazine | Public Housing, LIHTC, Research

Diverse Opportunities Draw Tech Workers to DFW via GlobeSt.com

Buoyed by double-digit tech-sector employment growth, Dallas-Fort Worth was among the top US markets for rising office rents during the past two years, according to CBRE’s annual Tech 30 report, which measures the tech industry’s impact on office rents in 30 leading US and Canadian tech markets. Dallas-Fort Worth had the sixth greatest rent growth on the list.

“Dallas-Fort Worth is identified as one of five markets with the greatest growth potential. The depth of a market’s talent pool is even more important to employers than the cost of doing business, and DFW is the largest tech labor market in Texas,” said Jeff Eiting, first vice president, CBRE. “Our large labor pool attracts the tech companies, and tech workers are attracted to the market because of the diverse job opportunities we offer.”

Read more...Diverse Opportunities Draw Tech Workers to DFW | GlobeSt.com

Economy Watch: Apartment Market Fundamentals Beginning to Shift via Multi-Housing News Online

After more than a decade of declines, the U.S. homeownership rate appears to have stopped falling, at least for now, Apartment List Rentonomics recently reported. Should the rate stand pat, or even start to rise, that will have implications for multifamily rental properties.

After years of decreases from the 2004 high of 69.2 percent, the homeownership rate appeared to have bottomed out in the second quarter of 2016, when the rate hit 62.9 percent. That was the lowest homeownership rate since 1965, but was still significantly higher than at the first half of the 20th century—especially before the invention of the 30-year mortgage—when the rate was well under 50 percent.

Read more...Economy Watch: Apartment Market Fundamentals Beginning to Shift

D-FW near the top of the list of markets with the most moves via Dallas News

If you've noticed a lot of out-of-state license plates, there's a reason.

Almost 80,000 people a year are moving to North Texas.

And the Dallas-Fort Worth area ranked second among top markets for moves, according to a new study by Updater.com, an online relocation technology firm.

Read more...D-FW near the top of the list of markets with the most moves | Real Estate | Dallas News

Pipeline Thins Out in Major Apt. Markets via GlobeSt.com

The apartment development pipeline has two main components: units under construction and those in the planning stages. With a total of about 100,000 apartments due to come on line in Dallas, New York City and Atlanta, including 39,400 in Dallas alone, it would stand to reason that there will be many more to follow.

However, RealPage analysis says this isn’t the case. In the case of the three metro areas cited above, there are a little over 23,000 units in the planning stages—i.e. approved by local regulators and scheduled to begin construction within a year.

Read more...Pipeline Thins Out in Major Apt. Markets | GlobeSt.com

Austin Economic Indicators 12/8/17 via Dallas Fed

The Austin economy expanded at a robust pace in October. The Austin Business-Cycle Index continued to grow above its long-term rate, as jobs remained strong and the unemployment rate reached its lowest level since the late 1990s. High-tech employment remained strong in the second quarter. Home affordability rose in the third quarter, while home sales remained steady at a high level.

Read more...Austin Economic Indicators - Dallasfed.org

Investor Focus Shifts in Multifamily via GlobeSt.com

Investors in the multifamily sector are turning their gaze outside the urban core. Capital One’s fourth annual survey of investor sentiment, conducted at the RealShare Apartments conference in Los Angeles, found that 43% are looking at secondary/tertiary markets, or more than twice as many as those who saw the greatest potential for value in urban markets, while another 35% said they see the best opportunities in the suburbs. A year ago, a plurality—47% of respondents—cited urban markets as the leading opportunity.

“All signs point to the multifamily sector heating up in 2018,” says Jeff Lee, president of Capital One Multifamily Finance. “Investors are looking to engage in secondary and tertiary markets, where they see increasing opportunity. These markets have seen rent growth, and their broad appeal should generate interest and activity as we head into 2018.”

Read more...Investor Focus Shifts in Multifamily | GlobeSt.com

Yardi: Year-Over-Year Rent Growth Rises to 2.5% Nationwide via Multifamily Executive Magazine

Average U.S. rents fell by $1 in November, down to $1,358, according to Yardi Matrix’s Matrix Monthly survey of 121 markets. This marks the second consecutive month of average rent decline, though Yardi notes that rents are stabilizing at moderate growth levels. The year-over-year rate of rent growth is up to 2.5% nationwide, up 10 basis points over October.

Yardi attributes the slight decline to seasonal factors. It maintains that the overall growth rate is steady despite ongoing new supply growth, affordability struggles in major coastal metros, and rent gain pressures in the Pacific Northwest.

Read more...Yardi: Year-Over-Year Rent Growth Rises to 2.5% Nationwide | Multifamily Executive Magazine

Deal Volume Ticks Upward Even as Pricing Slips via GlobeSt.com

Even as commercial property pricing has ticked downward in recent months, transaction volume has been moving in the opposite direction. Ten-X Commercial said Wednesday that investment activity increased by 3.2% in the third quarter, marking the second consecutive three-month period of quarterly increases.

Read more...Deal Volume Ticks Upward Even as Pricing Slips | GlobeSt.com

Cap Rates Hold their Ground as Interest Rates Move Higher via Nareit

Cap rates have been holding their ground, even as interest rates move higher. The resilience of pricing in the real estate sector should not be surprising, however, given the strength in the fundamentals that support demand for commercial space.

Indeed, real estate markets strengthened further in October, with cap rates reaching new lows for most property types, according to the latest data from Real Capital Analytics. These recent moves continue a downtrend that began in 2010 (chart above)

Read more...Cap Rates Hold their Ground as Interest Rates Move Higher | Nareit

Houston Economic Indicators 11/30/17 via Dallas Fed

Recovery from Hurricane Harvey was evident in October data. Employment bounced back, job ads improved, and leading indexes were neutral to positive for job growth ahead. Taken together, the outlook for Houston is positive.

Read more...Houston Economic Indicators - Dallasfed.org

Reis: Expect Moderation in Rent Growth as Market Absorbs New Supply via Multifamily Executive Magazine

National apartment unit vacancy rose by 10 basis points (bps) in the third quarter, up to 4.5%, while asking and effective rents rose by 1.0% and 0.9%, respectively, over the same period.

The vacancy shift falls in line with Reis’s expectations for the year, according to Victor Calanog, chief economist and senior vice president at the firm, in his Apartment Trends analysis for Q3 2017. Calanog says the industry should “expect a moderation in rent growth as the market absorbs new supply.”

Read more...Reis: Expect Moderation in Rent Growth as Market Absorbs New Supply | Multifamily Executive Magazine

Eleventh District Beige Book 11/29/2017 via Dallas Fed

The Eleventh District economy continued to expand at a moderate pace over the past six weeks. Manufacturing output strengthened, and activity in nonfinancial services increased. Retail sales growth continued but at a slower pace as the post-hurricane auto sales rush abated somewhat. Home sales rose during the reporting period. Loan demand was flat, and energy activity was largely unchanged. Crop conditions remained mostly favorable. Employment, wages and prices continued to increase, and widespread reports of a tight labor market persisted. Outlooks remained positive overall, and generally a bit more optimistic than in the prior reporting period.

Read more...Eleventh District Beige Book - Dallasfed.org

Exclusive Research Reveals Stable Outlook for the Multifamily Sector via National Real Estate Investor

Capital is continuing to flow to the multifamily sector. Despite concerns that the real estate cycle is peaking—and with high levels of multifamily construction in some metros—fundamentals have steadily improved and investment sales remain robust. Exclusive research conducted by NREI indicates that the market is likely to stay that course for at least another 12 months.

Read more...Exclusive Research Reveals Stable Outlook for the Multifamily Sector | National Real Estate Investor

Can a Market Be Too Hot? via GlobeSt.com

The Dallas/Fort Worth area has experienced impressive economic growth since the Great Recession. Affordability and job growth have attracted people to the area in that time frame.

According to the US Bureau of Labor Statistics, the DFW MSA ranks second in both rate of job growth and number of jobs added nationally. In Dallas alone, the population has grown more than 10% since 2010.

Read more...Can a Market Be Too Hot? | GlobeSt.com

Rental market tightens, but it may not last via Houston Chronicle

Houstonians leased about 17,000 apartments in the two months after Hurricane Harvey, far more than this region leases in most years, new data show.

The supercharged rental activity has led to a swift reversal in Houston's multifamily market. Landlords who were offering as many as three months of free rent before the storm are now able to raise prices, especially if they're near residential neighborhoods most affected by the hurricane.

read more...Rental market tightens, but it may not last - Houston Chronicle

Millennials Want to Own Homes Too, If U.S. Economy Would Consent via National Real Estate Investor

Kelsey Marshall and her boyfriend Chris Eidam, both 27 years old, call the home-buying process “terrifying.” But they’re clear about one thing: It beats the heck out of renting.

“We’re wasting money where we are right now,” near Bridgeport, Connecticut, Eidam said. “We just take our rent and we throw it away. That money doesn’t go to anything.”

If that line of thinking sounds familiar it’s because, contrary to much of what’s written about them, millennials have many of the same attitudes toward housing as their parents and grandparents. Most say they want to eventually own homes, and only rent because of financial necessity.

Read more...Millennials Want to Own Homes Too, If U.S. Economy Would Consent | National Real Estate Investor

Dallas-Fort Worth Economic Indicators via Dallas Fed

The Dallas–Fort Worth economy continued to expand in October, with business-cycle indexes posting above-trend growth and payroll employment climbing in both metros. Unemployment in Dallas fell to its lowest level in nearly 17 years, pointing to further tightening in the labor market. Continued healthy job creation has been the driver for the DFW office and industrial markets.

Read more...Dallas-Fort Worth Economic Indicators - Dallasfed.org

Once-Hot Apartment Construction Cooling as U.S. Housing Engine via National Real Estate Investor

Faster apartment building was instrumental in pulling the U.S. housing market out of its slump a decade ago. Now, that engine is starting to throttle back.

A softening in the multifamily segment is something to keep an eye on even as overall homebuilding -- which includes single-family dwellings that make up the largest share of the market -- is expected to keep moving forward.

Read more...Once-Hot Apartment Construction Cooling as U.S. Housing Engine | National Real Estate Investor

Emerging Trends in Real Estate® - US and Canada 2018 via PwC US Fin Services

Now in its 39th year, Emerging Trends in Real Estate is one of the oldest, most highly regarded annual industry outlook for the real estate and land use industry. The market outlooks included in each edition are based on an extensive survey, multiple interviews, and individual market focus groups. Readers’ interest in all markets continues to increase, so the 2018 edition provides a regionally based look at all 78 markets included in this year’s survey. Throughout the report, we’ll explore a variety of trends we’re seeing in the industry, as well as analyze the prospects for 78 metropolitan markets for the coming year.

Read more...Emerging Trends in Real Estate® - US and Canada 2018: PwC

Job Growth Slows Across Many Major Markets in September via MPF Research

Nationwide hiring levels continued to decelerate in September, with U.S. employers adding just under 1.8 million jobs in the year-ending September 2017. That figure grew the country’s job base 1.2%, according to preliminary data from the Bureau of Labor Statistics.

Among U.S. metropolitan areas, New York remained the top job gainer, though the gap between the Big Apple and runners up Atlanta and Dallas drastically narrowed. In the year-ending September 2017, New York created 77,900 positions, roughly half the July 2017 and September 2016 annual totals. The drop-off suggests the metro is approaching a growth ceiling, following months of notable expansion.

Read more...Job Growth Slows Across Many Major Markets in September - MPF Research

Texas Employment Forecast Nov 2017 via Dallas Fed

Incorporating October leading index and employment data and adjusting for the impacts of Hurricane Harvey, the Texas Employment Forecast suggests jobs will grow 2.6 percent this year (December/December), with an 80 percent confidence band of 2.2 to 3.0 percent.

The forecast was unchanged from the Dallas Fed’s previous estimate. Based on the forecast, 311,000 jobs will be added in the state this year, and employment in December 2017 will be 12.4 million (Chart 1).

Read more...Texas Employment Forecast - Dallasfed.org

D-FW apartment developers offer pet parks and pools to attract millennial renters via Dallas News

With more than 32,000 new apartments opening in North Texas this year, developers and leasing agents are scrambling to attract tenants.

In fierce competition for millennial renters, it takes more than a swimming pool and a clubroom to land apartment tenants.

New rental communities are piling on the perks to bring in customers and fill up their new projects. Leasing agents are touting everything from high-tech control systems to super-sized dog parks to lure renters.

Read more...D-FW apartment developers offer pet parks and pools to attract millennial renters | Commentary | Dallas News

Vacancy Uptick Seen as Apt. Deliveries Continue via GlobeSt.com

Even as multifamily remains the strongest commercial property sector by a variety of metrics, including investment sales volume, analysts are expecting deceleration in rent growth and, with that, in revenue growth as well. At Reis Inc., for example, chief economist Victor Calanog sums up a 10-basis point third-quarter uptick in nationwide vacancies and “paltry” asking and effective rent growth of 1% and 0.9%, respectively, by reiterating what he’d said in August: “expect a moderation in rent growth” as the market absorbs new supply.

Read more...Vacancy Uptick Seen as Apt. Deliveries Continue | GlobeSt.com

ALN Monthly Market Stats November 2017 via ALN Apartment Data

ALN Data just released their October 2017 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data. Check out their new website.

Read more...ALN Monthly Market Stats November 2017 via ALN Apartment Data

Yardi: Multifamily Rent Growth Continues to Decelerate via Multifamily Executive

The average U.S. monthly rent fell by $4 in October, down to $1,358, according to the most recent Yardi Matrix Matrix Monthly survey of 121 markets. Rent growth fell to 2.3% year over year (YOY) during the same period, down 30 basis points (bps) from September.

This drop reflects a number of seasonal and cyclic factors. For one, rent growth tends to slow at the top of the fourth quarter, and the multifamily market is cooling down on the whole from its cycle high in 2016. And the national monthly rent is only $5 lower than its all-time high, in August, and is currently $30 higher than it was one year ago.

Read more...Yardi: Multifamily Rent Growth Continues to Decelerate | Multifamily Executive Magazine | Rent Trends, Rents, Economic Conditions, Supply and Demand, Research, Occupancy and Vacancy Rate, Economics, Local Markets, Rent Growth, Forecast, Rental Market, Markets, Oversupply, business intelligence, Yardi:



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Austin Economic Indicators Nov. 2017 via Dallas Fed

The Austin economy expanded at a robust pace in September. The Austin Business-Cycle Index grew above its long-term trend, buoyed by strong job growth and a further decline in the area unemployment rate. Trade data for 2016 show that Austin exports continued to rise even as they declined for the state overall.

Read more...Austin Economic Indicators - Dallasfed.org

Dodge Construction Outlook Predicts Multifamily Retreat, Single-Family Expansion via Multifamily Executive Magazine

In the recently released 2018 Dodge Construction Outlook, Dodge Data & Analytics predicts total U.S. construction starts will rise by 3% in dollar volume, to $765 billion, in 2018.

“The U.S. construction industry has moved into a mature stage of expansion,” says Robert Murray, chief economist for Dodge Data & Analytics. “After rising 11% to 13% per year from 2012 through 2015, total construction starts advanced a more subdued 5% in 2016. An important question entering 2017 was whether the construction industry had the potential for further expansion. Several project types, including multifamily housing and hotels, have pulled back from their 2016 levels, but the current year has seen continued growth by single-family housing, office buildings, and warehouses.”

Read more...Dodge Construction Outlook Predicts Multifamily Retreat, Single-Family Expansion | Multifamily Executive Magazine | Multifamily, Multifamily Trends, Multifamily Building, Multifamily Starts, Single Family, Housing Starts, Housing Data, Market Research, Market Intelligence, Forecast, Dodge Data & Analytics

Renting homes is overtaking the housing market. Here’s why via USAToday

Single-family rentals — either detached homes or townhomes — are developing faster than any other portion of the housing market. These rentals outpace both single-family home purchases and apartment-style living, according to the Urban Institute.

“Almost all the housing demand in recent years has been filled by rental units,” says Sara Strochak, a research assistant with the Urban Institute. She also states that single-family rentals have gone up 30% within the last three years.

Read more...Renting homes is overtaking the housing market. Here’s why

Commercial Property Update: Apartment Markets Led the Way in the Third Quarter via Nareit

The apartment market led the way among commercial property markets in the third quarter, as robust demand pushed down the national vacancy rate and supported rent growth. Office, retail and industrial property markets each saw some easing of demand growth, leaving vacancy rates flat to up slightly. Rent growth has slowed from the rapid pace enjoyed in 2015 and 2016.

Read more...Commercial Property Update: Apartment Markets Led the Way in the Third Quarter | Nareit

Investment Sales Will End Year with a Drop in Volume Compared to 2016 via National Real Estate Investor

Investment sales got off to a slow start in 2017, setting the tone for what will likely be a slump in overall transaction volume by year-end, according to industry experts.

However, the slowdown in sales does not portend major trouble, as 2017 will still end with historically high deal volume. Rather, this year’s figures seem low compared to the banner years of 2015 and 2016, says Jim Costello, senior vice president at real estate research firm Real Capital Analytics (RCA). “It’s going to get hard to get back to the previous peak levels,” Costello says.

Read more...Investment Sales Will End Year with a Drop in Volume Compared to 2016

Dallas-area builders play catch-up with more apartment construction permits via Dallas News

Dallas-area apartment developers have kept up the building pace this year, adding new projects in recent months.

Dallas ranked second only to New York for total apartment building permits through the third quarter, according to a new report by Richardson-based RealPage.

Through September, developers in the Dallas area have received permits to start more than 20,000 apartments.

Read more...Dallas-area builders play catch-up with more apartment construction permits | Real Estate | Dallas News

NMHC/Kingsley Report: Renters Prefer the Basics in Amenities via Property Management Insider

Apartment operators shouldn’t assume that today’s preferred renter amenities are defined by the regions where they operate. The 2017 National Multifamily Housing Council/Kingsley Renter Preference Report unveiled in October suggests apartment residents around the country have some very distinct favorites that don’t necessarily jive with where they live.

The bi-annual report, which drew 272,000 responses from 1.1 million Gen Z to Boomer renters at mostly Class A and B properties, did confirm that technology and comfort are highly desirable. Getting a good cell phone signal in a climate-controlled apartment or community space is among the top must-have amenities.

Read more...NMHC/Kingsley Report: Renters Prefer the Basics in Amenities:



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GOP Tax Plan Carries Benefits for the CRE Industry via National Real Estate Investor

The new tax reform proposal unveiled by the House of Representatives appears to bode well for the commercial real estate sector.

The legislation, which still must work its way through Congress and could change, maintains many of the existing provisions that benefit the commercial real estate industry. For example, the bill continues to allow the deduction of interest expenses. While businesses currently can deduct interest expenses on commercial loans, the House bill seeks to cap this amount for some industries—except for commercial real estate, according to The New York Times.

Read more...GOP Tax Plan Carries Benefits for the CRE Industry | National Real Estate Investor

Austin Economic Indicators Nov 2017 via Dallas Fed

The Austin economy expanded at a robust pace in September. The Austin Business-Cycle Index grew above its long-term trend, buoyed by strong job growth and a further decline in the area unemployment rate. Trade data for 2016 show that Austin exports continued to rise even as they declined for the state overall.

Read more...Austin Economic Indicators - Dallasfed.org

US Apartment Demand Bounces Back from Slow Down in Early 2017 via CoStar Group

Renter demand for apartments continued to accelerate in the third quarter of 2017 as the market absorbed more than 70,000 units and the overall national vacancy rate for U.S. apartments continued to trend lower after turning sharply up at the end of last year.

"The third quarter (vacancy) numbers are a welcome sign (for owners) after the sharp increase at the end of last year. Overall, it was a strong third quarter, which was a nice surprise," said Michael Cohen, CoStar director of advisory services, during this week's State of the Multifamily Market Q3 2017 Review and Outlook. "We're still in the golden age for multifamily, but we're seeing signs of a gradual slowdown in the apartment market."

Read more...US Apartment Demand Bounces Back from Slow Down in Early 2017 - CoStar Group

CRE Fares Well in House of Representatives' Tax Plan via GlobeSt.com

Thursday morning the US House of Representatives unveiled its long-anticipated $1.51-trillion tax reform measure, a sweeping piece of legislation called the “Tax Cuts and Jobs Act.”

To cut to the chase for our readers: the bill has largely good news for the commercial real estate industry. The capital gains incentive is retained as are the current like kind exchange 1031 rules. The bill also recognizes that the cost of real estate debt is a necessary business expense and interest on debt used in a real estate trade or business would continue to be deductible.

Read more...CRE Fares Well in House of Representatives' Tax Plan | GlobeSt.com

Houston Economic Indicators 10/31/17 via Dallas Fed

Hurricane Harvey significantly affected economic activity in Houston at the end of August and through a good portion of September. Available data indicate that recovery is well underway for some sectors. Home sales rebounded in September, and refining and petrochemical facilities are operating at normal rates. While signs that Houston’s economy was weakening heading into the fall warrant attention over the next few months, the medium-term outlook for Houston remains positive

Read more...Houston Economic Indicators - Dallasfed.org

Rent Growth Slows Down in the SFR Sector via National Real Estate Investor

While owners of single-family rental (SFR) properties are still raising rents, they are not doing so as quickly as they had over the last few years.

“Rent growth is still solid, but generally decelerating when you compare year-over-year growth now to the year-over-year growth seen one year ago,” says Rick Palacios, director of research of John Burns Real Estate Consulting, an independent research firm based in Irvine, Calif.

Read more...Rent Growth Slows Down in the SFR Sector | National Real Estate Investor

It’s 6 Months Running for Price Declines via GlobeSt.com

Commercial property pricing slipped by 0.2% in October, marking the sixth month in a row of declining values, Ten-X said Thursday afternoon. At just 3.1%, year-over-year growth in pricing across commercial real estate sectors is now the weakest since Ten-X instituted its monthly Commercial Real Estate Nowcast.

“With a sixth consecutive month of decline, the market’s malaise can safely be described as a legitimate trend,” says Peter Muoio, chief economist with Ten-X. “The Ten-X CRE Nowcast’s annual growth rate has again reached its lowest level since we conceived the index, falling well below the 3.4% annual growth recorded last month, which was the previous low.”

Read more...It’s 6 Months Running for Price Declines | GlobeSt.com

Dallas-Fort Worth Economic Indicators via Dallas Fed

The Dallas–Fort Worth economy strengthened in September. The Dallas and Fort Worth business-cycle indexes expanded further. Job gains were solid last month, and unemployment in both metros fell to its lowest level in nearly a year, pointing to further tightening in labor markets. Recently released data show DFW outpaced the U.S. in real median household income and real gross domestic product (GDP) growth in 2016.

Read more...Dallas-Fort Worth Economic Indicators - Dallasfed.org

Report shows renters getting older and better educated via ConsumerAffairs.com

Only a couple of decades ago, renters were typically people in their 20s who lived in dingy apartments in poorly maintained old buildings until they saved enough to buy a place.

Well, as Bob Dylan noted back in the 60s, the times, they are a changin'.

Today's renters are a different breed who want a place offering a convenient, quality lifestyle, a comfortable living space, a place to exercise, and a place to socialize -- all in one package.

A report from RentCafé points to data from the Census Bureau, which shows that there have been numerous changes to renting since 2009 -- around the time when the housing meltdown had more people looking at renting rather than owning.

Read more...Report shows renters getting older and better educated

Q3 Multifamily Occupancy and Rents Review via ALN Apartment Data

Nationally, the multifamily market performed well in the third quarter of 2017 with average occupancy for conventional properties rising 0.4% to 92.2%. However, compared to this time last year average occupancy is down 0.4% as new construction outpaced absorption in many markets. Effective rents are up 0.7% over three months ago to $1.39 per square foot and $1246 per unit. Compared to the end of Q3 2016, effective rents are up a healthy 6.1%, though some markets are seeing a slowdown in rent growth. Here a look at the different regions and how they fared in the quarter.

Read more...Q3 Multifamily Occupancy and Rents Review - ALN Apartment Data

Rent prices are dropping in Dallas, according to this study via CultureMap Dallas

Earlier this month, Abodo Apartments released its October rent report, sharing rental price trends from September to October. As the fourth quarter in business begins for real estate companies, Abodo examined trends in the Dallas rental market and the major changes seen throughout the quarter.

What happened in the Dallas rental market last quarter? A few key findings include:

Read more...Rent prices are dropping in Dallas, according to this study - CultureMap Dallas

Developers Are Building for the Next Cycle via GlobeSt.com

“There is going to be a pause at some point in time, and what we want to do is queue up the land for the next cycle,” Jim Andersen, SVP of Trammell Crow Co., said on the Growing Top Metros: Geographical Opportunities panel at RealShare Los Angeles. The panel of development and investment players—which included panel moderator Laurie Lustig-Bower, EVP at CBRE; Scott R. McClave, senior principal of transactions and finance at The Bascom Group; Dylan Simon, SVP at Colliers International; and Natalie Cariola, VP of Sales at Zumper—discussed where they are looking for opportunities in this market.

Read more...Developers Are Building for the Next Cycle | GlobeSt.com

ALN Monthly Market Stats October 2017 via ALN Apartment Data

ALN Data just released their September 2017 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data. Check out their new website.

Read more...ALN Monthly Market Stats October 2017 via ALN Apartment Data

Fundamentals for Rental Demand Are Good via GlobeSt.com

A steady US economy and net positives in the multifamily sector are keeping prices in the core markets high. And the consensus is that demographics will continue to keep demand for apartments strong. But will apartments continue to ride the wave of these trends for the foreseeable future, or will the momentum abate as the uncertainties—including wage growth, overbuilding and global factors—come into sharper focus?

Expert panelists at RealShare Apartments, a national two-day event at the Westin Bonaventure in Los Angeles, took on those questions and the consensus was that strong apartment demand will continue.

Read more...Fundamentals for Rental Demand Are Good | GlobeSt.com

D-FW apartment rent increases stuck on slow in September via Dallas News

Dallas-Fort Worth apartment rent increases slowed to a crawl in September.

Average D-FW area rents were up 1.9 percent from September 2016. That's just a third of average annual rent gains in the last few years, according to a report from Richardson-based Axiometrics.

Read more...D-FW apartment rent increases stuck on slow in September | Real Estate | Dallas News

Eleventh District Beige Book Oct 18 2017 via Dallas Fed

The Eleventh District economy continued to expand at a moderate pace over the past six weeks, and most contacts do not expect significant long-term disruption due to Hurricane Harvey. Manufacturing output strengthened, and activity in nonfinancial services increased. Retail sales growth continued to accelerate, with a surge in auto sales to replace vehicles damaged by the hurricane. Homes sales weakened during the reporting period and prices were flat. Growth in the financial services and energy sectors continued but at a slower pace, and crop conditions remained mostly favorable. Employment, wages and prices increased, particularly in manufacturing. Outlooks remained positive overall.

Read more...Eleventh District Beige Book - Dallasfed.org

Harvey’s Impact on Houston Apartment Market via Axiometrics.com

A month or so after Hurricane Harvey, Houston’s apartment occupancy and rents are trending upward once more. However, pricing is not spiking, partly reflecting that the metro’s major owners and operators of apartment product recognize the importance of assisting displaced households as the rebuilding process begins.

Metro Houston’s overall occupancy rate in the September performance survey comes in at 93.0%, up 82 basis points (bps) from the August result of 92.2%. These findings suggest the operable apartment stock is as much as 98% to 99% full, as RealPage’s count of apartments temporarily offline points to a figure that could reach up to 43,000 units.

Read more...Axiometrics.com | September 2017 Market Trends

Displaced Residents Boost Rentals, Accelerating Recovery via GlobeSt.com

Hurricane Harvey was the strongest storm to hit the region in more than 55 years, dumping 1.2 trillion gallons of rain in a matter of days. A quickly draining construction pipeline and reduced inventory due to flooding is causing supply to tighten.

At the same time, demand from displaced single-family residents, contract workers and natural growth is favoring landlords in increased rentals. Harvey effectively accelerated the multifamily recovery timeline, propelling Houston into a landlord-favored market approximately 18 months ahead of schedule.

Read more...Displaced Residents Boost Rentals, Accelerating Recovery | GlobeSt.com

5 Trends in Multifamily Investing for 2018 via Multi-Housing News Online

As 2017 ends, it’s time to predict upcoming trends in the multifamily rental market. If you’re a multifamily investor, there will be a few surprises and some changes you should be prepared for. Here are five areas to follow.

BUILDING RENOVATIONS STAY THE COURSE
There’s a considerable amount of new construction in cities where there is demonstrated and structural job growth, including Portland, Seattle, Los Angeles and Denver. Traditionally, developers have been able to pencil in growth and get a good return for the risk of that development. New multifamily units being constructed in urban areas, urban cores or high-growth and high-job areas have caused a softening in the Class A market for the first time in years. In the new-built market, we’re finally seeing a plateau where supply is meeting demand. Do we need more Class B properties built in suburban locations to meet demand? Absolutely. Are they going to get built? Probably not. The risk/return for developers just doesn’t pencil. The upside to a softening market? Older existing Class B multifamily units built in the ‘70s, ‘80s and even ‘90s, which have been renovated will be in higher demand.

Read more...5 Trends in Multifamily Investing for 2018

Costs, Regs Challenge Profitability in Years Ahead via Multifamily Executive Magazine

Apartments have been the darling of the real estate industry for almost a decade. Even this deep into a long, bullish run, investment dollars are still available to be placed into the sector. However, the tide has shifted, making it harder for less-savvy investors and developers to keep up their streak of profitability, or even to remain in the game. Those left—undoubtedly, those more seasoned—are dealing with the challenges of the day, including land sourcing, rising construction costs, and less aggressive financing from construction lenders.

Read more...Costs, Regs Challenge Profitability in Years Ahead | Multifamily Executive Magazine | Capital Markets, Finance, Construction Finance, Debt and Equity, Financing, value-add, Dodd–Frank

Investors Pour into Small Markets, Drive Price Momentum via CoStar Group

Commercial real estate investors priced out of major U.S. markets have expanded their scope to secondary and tertiary markets to find properties yielding more generous returns, a trend typical of late-inning property cycles.

But the robust demand for real estate and the current cycle's longevity set this growth period apart from past ones and suggest that smaller markets will continue to reap investment for some time.

Read more...Investors Pour into Small Markets, Drive Price Momentum - CoStar Group

The Right Multifamily Investment Opportunities for HNW Investors via National Real Estate Investor

As high-net-worth (HNW) investors and family offices look to increase their portfolio allocations in real estate, the multifamily sector continues to offer attractive investment opportunities. HNW investors demanding predictable cash flows from core properties or value‑add yields on ground-up and redevelopment projects can meet these objectives in the multifamily sector. In this context, what are the market cues that can help pick opportunities that will generate returns that align with portfolio goals?

Read more...The Right Multifamily Investment Opportunities for HNW Investors | National Real Estate Investor

Apartment rents rising in Harvey's wake via Houston Chronicle

Apartment seekers suddenly are facing higher rents as occupancy tightens across Houston and the damage estimate for flooded units reaches into the tens of thousands.

Complexes that stayed dry in heavily flooded areas like west Houston, Kingwood and Spring have been slammed with new tenants. Landlords there are finding their apartments are worth much more than they were before Hurricane Harvey, when there was a glut of empty units and flagging demand.

Read more...Apartment rents rising in Harvey's wake - Houston Chronicle

Austin Economic Indicators October 2017 via Dallas Fed

The Austin economy expanded at a moderate pace in August. Growth in the Austin Business-Cycle Index continued to fall below its long-term trend as jobs declined in August, although the area unemployment rate remained flat at a low level. Data on real output growth show that Austin was the fastest-growing Texas metro in 2016.

Read more...Austin Economic Indicators - Dallasfed.org

D-FW's apartment boom has peaked but don't expect a crash via Dallas News

A big chunk of North Texas' building boom is apartments.

For the last few years, the Dallas-Fort Worth area has led the nation in new apartments. More than 100,000 new units have opened their doors in the last four years. And average rents in the area have jumped by almost 30 percent since 2012.

While there are still almost 48,000 rental units under construction in the D-FW area, a slowdown in rent growth and soaring building costs are likely to tamp down the hot apartment building market in the coming year.

Read more...D-FW's apartment boom has peaked but don't expect a crash | Real Estate | Dallas News

Adopting Recycling is Becoming Easier and More Desirable in Multifamily via Property Management Insider

Contracting with a waste management vendor is the first step toward getting the ball rolling on community recycling. But the presence of recycling bins isn’t always enough to get residents involved in one of the most common earth-friendly initiatives.

The success of any multifamily recycling program comes from within. Property managers and leasing staff hold the keys to community wide participation, not just the waste management vendor.

“The staff on each property is as important as anybody in starting a program,” says Susan Holley, Community Waste Disposal’s Director of Business Development. “It takes promotion from the management company’s onsite personnel. Many residents want recycling.”

Read moe...Adopting Recycling is Becoming Easier and More Desirable in Multifamily

Moderate Pace Continues for Apt. Rent Gains via GlobeSt.com

Although lower in velocity than the apartment sector saw a few years ago, rent growth is continuing across the board, RealPage Inc. said Wednesday. However, occupancy has slipped fractionally and the balance of 2017 poses a question mark around this metric.

Effective rents for new leases climbed 0.9% in the third quarter and 2.6% year over year, according to data from RealPage and Axiometrics. Annual rent growth has maintained a rate between 2.5% and 3% thus far this year, slowed considerably by an influx of new product. In contrast, annual growth of 5% or better was not uncommon in 2015.

Read more...Moderate Pace Continues for Apt. Rent Gains | GlobeSt.com

Good news for Dallas-area apartment residents: Rent increases are slowing via Dallas News

North Texas apartment residents will be happy to hear that rent increases are moderating after several years of steep gains.

Apartment rents were about 3 percent higher in the third quarter compared with the same period a year ago, analysts at RealPage Inc. said Tuesday. That's half the 6 percent jumps the Dallas-Fort Worth area saw in 2015 and 2016.

Read more...Good news for Dallas-area apartment residents: Rent increases are slowing | Real Estate | Dallas News

What Renters Say: 21 Percent Have No Plans To Ever Buy via Rental Housing Journal

Renters say the three most important factors when considering a place to live are affordability, neighborhood safety and commute, according to a new survey.

Also for those renters surveyed, rent is the single largest expense each month for 82 percent of them, according to Zumper’s 2017 survey of U.S. renters. Most also say they think they pay too much in rent.

And, one in five people (21% of those surveyed) do not plan to purchase a home in the future.

Read more...What Renters Say: 21 Percent Have No Plans To Ever Buy

Multifamily Outlook via The Balance Sheet - Yardi Corporate Blog

Yardi Matrix reports another strong summer for the multifamily real estate sector. The fundamentals were downgraded from “great” to “consistently good” but several factors suggest continued, healthy performance.

Even rapid development in some of the nation’s hottest markets has slowed to a more sustainable pace due to construction labor shortages. The shortages may have longer-lasting effects due to disaster recovery efforts throughout the United States.

Read more...Multifamily Outlook | The Balance Sheet - Yardi Corporate Blog

Prices Rise for Apartment Buildings, But Fewer Properties Sell via National Real Estate Investor

Investors continue to buy fewer apartment properties than they did last year. Yet prices continue to rise.

“It’s another down month for volume, but prices are still increasing,” says James Costello, senior vice president for Real Capital Analytics (RCA), a New York City-based research firm.

Read more...Prices Rise for Apartment Buildings, But Fewer Properties Sell | National Real Estate Investor

As Many as 43,000 Apartments Appear Off Line in Metro Houston via MPF Research

Up to 43,000 apartments in metro Houston were knocked out of operation due to flooding from Hurricane Harvey. That tally represents about 6% of the nation’s fourth-largest apartment market.

Flooding damage extends across many neighborhoods as a result of the rainfall in Houston, reported now by the National Weather Service at a U.S. record of more than 64 inches. Many of Houston’s apartment properties lie in or near 100-year flood plains, as the metro’s landscape is very flat.

Read more...As Many as 43,000 Apartments Appear Off Line in Metro Houston - MPF Research

Reis: Vacancy Rate Rises to 4.5% in Q3 2017 via Multifamily Executive Magazine

Asking rents grew by 1.0% across the country in the third quarter of 2017, up to a national average of $1,356, while effective rents grew by 0.9% over the same period, up to a $1,295 national average, according to Reis’s Q3 2017 Apartment Preliminary Trends Announcement. The healthy rent-growth rates reflect confidence in the current market, as well as in the continued balance between demand growth and expected supply growth, notes the research firm.

Read more...Reis: Vacancy Rate Rises to 4.5% in Q3 2017 | Multifamily Executive Magazine

Apartment Construction Delay Estimate: 56,000 Units via Axiometrics

The delays in apartment construction just keep on coming, and we now have an estimate of how many new units scheduled for completion in 2017 will actually deliver in 2018.

Based on a formula using last year’s delay percentage as a base, Axiometrics, a RealPage company, estimates that some 56,186 units will be delayed into next year. That figure is up from 50,658 delayed from 2016 to 2017, which in turn was a huge leap from 14,805 from 2015 to 2016.

Read more...Axiometrics.com | Apartment Construction Delay Estimate: 56,000 Units

Hurricane Harvey Unlikely to Throw Texas Off Course via Dallas Fed

Hurricane Harvey caused widespread damage and broad disruption to the Southeast Texas economy. Preliminary estimates indicate that Harvey will be one of the costliest U.S. hurricanes, ahead of Sandy and behind Katrina. However, the storm’s negative impact on employment and business activity is expected to be transitory and should not derail the state’s positive economic momentum. The Federal Reserve Bank of Dallas’ forecast for 2017 job growth is unchanged at 2.6 percent (December to December).

Read more...Hurricane Harvey Unlikely to Throw Texas Off Course - Dallasfed.org

Market ‘Malaise’ Lingers As Pricing Ebbs via GlobeSt.com

Property pricing continued to decline over the past month, with Ten-X’s latest Commercial Real Estate Nowcast showing erosion of 0.1% compared to August. The five-month streak of falling prices comes amid divergent opinions among investors over the duration of the business cycle, a higher interest rate environment and a lack of meaningful improvement in fundamentals for many sectors, Ten-X said Thursday.

“The Nowcast’s fifth consecutive monthly decline in September indicates the market has again failed to shake off its malaise, as a murky business cycle prognosis and tightening monetary policy continue to take their toll,” says Peter Muoio, chief economist with Ten-X. “The Nowcast’s annual growth rate is at its lowest level since we introduced the index, and several CRE sectors are in similar slowdowns.

Read more...Market ‘Malaise’ Lingers As Pricing Ebbs | GlobeSt.com

Apt. Sector Holds the Line on Vacancies via GlobeSt.com

The multifamily sector is containing the effects of increased supply on occupancy, as the national vacancy rate increased by just 10 basis points during the third quarter to 4.5%, a smaller-than-expected uptick, Reis said Tuesday. Even as vacancies rose during Q3, so did both asking and effective rents on a national basis.

The average asking rent grew 1.0% in Q3, just under the average quarterly growth rate of 1.1% seen over the previous six quarters. Similarly, effective rent growth was 0.9% in the quarter, also just below the average seen over the prior six quarters: 1.0%.

Read more...Apt. Sector Holds the Line on Vacancies | GlobeSt.com

Houston Economic Indicators September 2017 via Dallas Fed

The Houston economy continued to expand at a modest, but slower, pace through August. The business-cycle index and employment data were weaker, and the energy industry provided less of a boost to Houston over the summer. Hitting at the end of August, Hurricane Harvey was not included in the jobs data for August, which counts jobs on the payroll that included the 12th day of the month. However, analysis by the Dallas Fed suggests that while Harvey’s impact will be felt keenly, Houston and the Texas Gulf Coast are expected to recover quickly. Overall, while the near-term outlook is uncertain, the medium-term outlook remains positive.

Read more...Houston Economic Indicators - Dallasfed.org

How Will Buyers and Sellers Bridge the Current Pricing Gap? via National Real Estate Investor

The pricing gap that has emerged in the commercial real estate market is shouldering much of the blame for slowing transaction volume. How that gap is resolved—and how long it takes to narrow—is a top concern for investors still sitting on a lot of dry powder.

Investors still have a strong appetite for real estate, but still climbing property values are making them nervous about being able to execute on deals. A first half of 2017 survey of alternative asset investors by London-based research firm Preqin found that a majority of respondents, 72 percent, plan to increase or maintain commitments to private real estate funds over the next 12 months. However, 53 percent said it is now harder to source attractive investment opportunities, and 72 percent view pricing and valuation as the key issue facing the industry over the next 12 months.

Read more...How Will Buyers and Sellers Bridge the Current Pricing Gap? | National Real Estate Investor

Reis: Apartment Vacancy Rate increased in Q3 to 4.5% via Calculated Risk

Reis reported that the apartment vacancy rate was at 4.5% in Q3 2017, up from 4.4% in Q2, and up from 4.1% in Q3 2016. This is the highest vacancy rate since Q4 2012 (although the increase has been small). The vacancy rate peaked at 8.0% at the end of 2009.

From Reis:
The apartment market continued to withstand the pressure from added supply in the third quarter as the national vacancy rate increased only 10 basis points to 4.5% in the quarter.

Read more...Calculated Risk: Reis: Apartment Vacancy Rate increased in Q3 to 4.5%

Renters Looking to Live Green: AMLI Survey via Multi-Housing News Online

Green living has quickly gone from a recommendation to a requirement in most multifamily communities. With residents becoming more aware of the lasting benefits of sustainability, many renters are searching for green apartments and communities that incorporate environmentally conscious elements. AMLI’s Sustainable Living Index shows that 84 percent of 2,800 residents surveyed say living in a sustainable or green home is important to them, while 85 percent say it is beneficial to their long-term health.

Read more...Renters Looking to Live Green: AMLI Survey

ALN Monthly Market Stats September 2017 via ALN Apartment Data

ALN Data just released their August 2017 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data. Check out their new website.

Read more...ALN Monthly Market Stats September 2017 via ALN Apartment Data

Dallas-Fort Worth Economic Indicators Sept 2017 via Dallas Fed

The Dallas–Fort Worth (DFW) economy continued to expand in August. Job growth was modest, and the unemployment rate edged up in both metros. While recent job growth has been below last year’s strong pace, labor market indicators suggest this is likely due to continued tightness in labor markets rather than an underlying weakness in the local economy.

Read more...Dallas-Fort Worth Economic Indicators - Dallasfed.org

Affordable Housing Developers Face New Challenges via National Real Estate Investor

Affordable housing developers are facing more obstacles to building new projects, even though the need for affordable housing seems to grow stronger every year.

“We believe affordable housing production, that is, the development or preservation of projects financed with Low Income Housing Tax Credits (LIHTCs), will be at best flat to last year,” says Richard Gerwitz, co-head of Citi Community Capital, a community lending and investment arm of Citi.

Read more...Affordable Housing Developers Face New Challenges | National Real Estate Investor

August 2017 Market Trends via Axiometrics

Effective rent growth dips from the previous month in 29 out of the 50 major apartment markets led to a decrease in the national rate in August, which has been typical in August in all but the most booming years.

August’s rate of 2.2% was down 19 basis points (bps) from July’s 2.4% and was 66 bps lower than the 2.9% of August 2016. Despite, the decline, apartment market performance remained remarkably stable this year, with rent-growth rates staying within a 41-bps range since November 2016.

Read more...Axiometrics.com | August 2017 Market Trends

Texas Multifamily Investors Focused on Dallas, Tertiary Markets via Urban Land Magazine

Texas markets are meeting a healthy demand for multifamily housing from millennials who are reaching renting age and baby boomers who are downsizing, while attracting investment from around the United States.

“The millennial cohort is just coming into the rental pool,” said Gary Goodman, senior vice president of Passco Cos., an Irvine, California–based acquirer of Class A multifamily properties. “That’s a huge demand factor.” Millennials, unlike previous generations, are delaying marriage, children, and homebuying while showing a penchant for living in an urban, multifamily setting.

Read more...Texas Multifamily Investors Focused on Dallas, Tertiary Markets - Urban Land Magazine

Yardi: Rent Growth Decelerates as New Completions Slow via Multifamily Executive Magazine

The average U.S. monthly rent rose by $1, to $1,352, in August, remaining essentially flat as apartment completions begin to slow across many of the 121 markets in Yardi Matrix’s Matrix Monthly survey. Meanwhile, the national rent-growth rate fell to 2.4%, down 20 basis points (bps) from July. (Despite these slowdowns, rents have increased every month this year.) Economic conditions and multifamily demand remain strong.

Read more...Yardi: Rent Growth Decelerates as New Completions Slow | Multifamily Executive Magazine

What Can Texas CRE Owners Expect from the Insurance Process? via National Real Estate Investor

It’s been nearly three weeks since Hurricane Harvey made landfall in Rockport, which lies along the southeastern coast of Texas. While emergency response efforts in the wake of the massive storm, which dumped a record-setting 51 inches of rain on the region, may be winding down, the insurance process for commercial and residential property owners is just getting under way.

The question yet to be definitively answered is: Just how much damage did the storm inflict on the region’s real estate, and how much will insurance cover the claims?

Read more...What Can Texas CRE Owners Expect from the Insurance Process? | National Real Estate Investor

5 Ways to Help Residents Calculate Renters Insurance Coverage via Property Management Insider

Property managers have probably heard over and over the reasons why residents or applicants don’t want renters insurance. “Renters insurance is too expensive,” “My stuff isn’t worth that much anyway,” and “The apartment is already insured, right?”

These are some of the common misconceptions, according to the National Association of Insurance Commissioners (NAIC). While including renters insurance in leases is an effective way to cover everybody in the event of an apartment loss, the concept can at times be hard for residents to swallow. For some prospects, the mere mention of mandatory renters insurance could be enough to lose a potential lease.

Read more...5 Ways to Help Residents Calculate Renters Insurance Coverage

Dallas apartment permits dip 20 percent in the first real sign of a building slowdown via Dallas News

The long-predicted slowdown in North Texas apartment construction may finally be in the works.

With over 50,000 rental units under construction, Dallas-Fort Worth has been the top apartment building market in the country in recent years. But a significant slowdown in permits for new apartments this year may herald a decline in building cranes on our horizon.

Read more...Dallas apartment permits dip 20 percent in the first real sign of a building slowdown | Real Estate | Dallas News

Weighing the CMBS Impact of Harvey and Irma via GlobeSt.com

A pair of back-to-back hurricanes in the space of a week may cause a near-term rise in CMBS delinquencies, according to Fitch Ratings and S&P Global Ratings. The exposure of billions of dollars in securitized commercial mortgages to the effects of Hurricanes Harvey and Irma comes as maturity performance is largely in line with expectations and the delinquency rate continues to decline.

Exactly how much property has been stricken by flooding, wind damage and other effects of Harvey and Irma isn’t yet clear.

Read more...Weighing the CMBS Impact of Harvey and Irma | GlobeSt.com

Rents are collapsing in some of America's biggest cities via Business Insider

An inconvenient math for housing is beginning to dog Chicago: The third largest city in the US has been losing population for years. Not huge numbers, but it adds up… In 2016, according to the Census estimate, the population dropped by about 9,000 people. Since 2014, the population has dropped by about 14,000 people. Chicago’s fiscal woes, junk credit rating, and the threat of bankruptcy hanging over it don’t help.

Since 2012, nearly 26,000 multifamily rental units have been completed in the city, according to Fannie Mae, which for 2017 sees “elevated volume of new supply, particularly in the Loop/River North/Gold Coast submarkets.” This does not include condos and single-family homes that were bought by investors and have reappeared on the rental market. Over the same five-year period, Chicago’s population has dropped by 9,000 people.

Read more...Rents are collapsing in some of America's biggest cities - Business Insider

Hurricane Harvey’s Multifamily Impact via Multi-Housing News Online

The devastation of Hurricane Harvey has destroyed around 100,000 homes, with 15 percent of the multifamily stock being wiped out. With many families being displaced and in need of shelter, the multifamily community is working on assessing damage, beginning reconstruction and getting operations back in working order.

Read more...Hurricane Harvey’s Multifamily Impact

Austin Economic Indicators September 2017 via Dallas Fed

The Austin economy expanded at a moderate pace in July. The Austin Business-Cycle Index continued to grow near its long-term trend, with declining jobs in July offset to some degree by a further fall in the area jobless rate. High-tech jobs continued to grow but at a subdued pace compared with the last several years. Austin’s residential real estate market remains tight, and home affordability declined in the second quarter to a post-recession low.

Houston's apartment surplus will come in handy after Harvey via Houston Chronicle

Houston has one of the highest apartment vacancy rates in the nation, and that's a good thing in the wake of Hurricane Harvey.

With 47,000 vacant units spread across the metro area, Houston is in a good position to meet the upcoming demand for apartments by people displaced by the storm. Another 21,000 units are in the process of being built, although some may have been destroyed, according to real estate information firm RealPage.

Read more...Houston's apartment surplus will come in handy after Harvey - Houston Chronicle

Investment Sales Volume Is Slowing Down via National Real Estate Investor

Investment sales volume continued to fall in July, the most recent month for which data is available, as property prices rose, according to recently released data.

The U.S. Capital Trends report from Real Capital Analytics (RCA), a New York City-based research company, showed that total deal volume for the month came in at $26.5 billion— down 28 percent year-over-year.

Read more...Investment Sales Volume Is Slowing Down | National Real Estate Investor

Eleventh District Beige Book 9/6/17 via Dallas Fed

The Eleventh District economy continued to expand at a moderate pace over the past six weeks. Manufacturing output strengthened, and activity in nonfinancial services increased. Growth in retail sales accelerated, in part due to a rebound in auto sales. Home sales rose slightly, but office leasing activity was mixed. Loan volumes expanded, while demand for oilfield services was flat. Crop conditions remained mostly favorable. Employment, wages and prices increased. Outlooks remained positive, although several contacts expressed concern that policy-related uncertainty would impact the broader economy.

Read more...Eleventh District Beige Book - Dallasfed.org

Texas Multifamily Investors Focused on Dallas, Tertiary Markets via Urban Land Magazine

Texas markets are meeting a healthy demand for multifamily housing from millennials who are reaching renting age and baby boomers who are downsizing, while attracting investment from around the United States.

“The millennial cohort is just coming into the rental pool,” said Gary Goodman, senior vice president of Passco Cos., an Irvine, California–based acquirer of Class A multifamily properties. “That’s a huge demand factor.” Millennials, unlike previous generations, are delaying marriage, children, and homebuying while showing a penchant for living in an urban, multifamily setting.

Read more...Texas Multifamily Investors Focused on Dallas, Tertiary Markets - Urban Land Magazine

High Construction Volume Softens Multifamily Investor Sentiment via Multifamily Executive Magazine

Investors in the overall commercial real estate market are proceeding with more caution on new investments in the third quarter of 2017, according to real estate investment and advisory firm Marcus & Millichap. The third-quarter NREI/Marcus & Millichap Investor Sentiment Survey shows a gradual cooling trend in commercial investor sentiment. The investor sentiment index fell to 150 this quarter, down from 153 in the fourth quarter of 2016.

In the multifamily sector, sentiment about apartments has eased among investors in the past year, despite strong demand for multifamily units and strong fundamentals.

Read more...High Construction Volume Softens Multifamily Investor Sentiment | Multifamily Executive Magazine

Apartment Completions Shift Downward via GlobeSt.com

Completions of new apartment builds have slowed this year, and so have annual rent gains, according to the August Yardi Matrix report, issued Thursday. Multifamily operators eked out an average $1 increase in rents this month, bringing the national average across 121 markets to $1,352 and maintaining a streak of monthly rent gains during 2017.

Read more...Apartment Completions Shift Downward | GlobeSt.com

Large Number of Vacant Apartments Will Help Houston in Harvey Aftermath via Multifamily Executive Magazine

It still remains to be seen how much property damage and economic loss Hurricane Harvey will have caused in and around Houston once the storm has finally left the metro. The region is still focused on getting people to safety and finding shelter for displaced residents.

Houston, the fourth-most populous city in the country, has roughly 6.5 million people living in its metro area. It also has a huge supply of apartments—about 662,400 units as of mid-2017, according to RealPage calculations.

Read more...Large Number of Vacant Apartments Will Help Houston in Harvey Aftermath | Multifamily Executive Magazine

How Hurricane Harvey Will Affect Texas Apartments, Hotels And Labor via Bisnow

It has been one week since Hurricane Harvey first hit Texas (and mere days since it left), so it is hard to say with any certainty how the Texas economy will respond over the next six months to a year. What we can do is look at the past, and that tells us DFW may see some spillover activity, but also some spillover pain.

“What we have seen in other markets after a big natural disaster is … you do get a bump in apartment leasing,” RealPage Chief Economist Greg Willet said.

Read more...How Hurricane Harvey Will Affect Texas Apartments, Hotels And Labor - Economy

Harvey Hurts Houston Mortgage Bonds Already Feeling Oil Pain via Bloomberg

Declining energy prices have already battered Houston’s real estate market. Now, Hurricane Harvey is making it even worse.

Some $8.9 billion of loans packaged into commercial mortgage-backed securities since the financial crisis are supported by Houston-area offices, malls and hotels, Morgan Stanley analyst Richard Hill said in a note Monday. And, across Texas, almost $30 billion of these loans have exposure to official disaster areas, according to Trepp, a specialist firm that tracks such debt.

Read more...Harvey Hurts Houston Mortgage Bonds Already Feeling Oil Pain - Bloomberg

Houston Economic Indicators August 29, 2017 - Dallas Fed

Note: The data and analysis in this report are based on information available prior to Hurricane Harvey making landfall in Texas.

The Houston economy continued to expand at a moderate pace through July. Bankruptcy filings, which are a lagging indicator of business conditions, increased markedly in the first half of the year. Leading indicators continue to suggest modest to moderate job growth going forward. Overall, the outlook for the Houston economy remains positive.

Read more...Houston Economic Indicators - Dallasfed.org

6 Ways to Prepare for and Recover from Natural Disasters via Property Management Insider

Hurricane Harvey slammed the South Texas coast this weekend, flooding cities with trillions of gallons of water and bringing tornadoes with damaging winds in its path. Harvey has quickly become one of the most catastrophic storms to date. Flooding in metro Houston will displace huge block of the metro’s population of about 6.5 million people, according to a study from RealPage’s data analytics team.

As Texas and the United States prepares for the recovery process, many will be tasked with making property decisions. We have rounded up a few articles for apartment residents, multifamily investors and owners as they recover from the storm—and those unaffected who are contemplating steps for future natural disasters.

Read more...6 Ways to Prepare for and Recover from Natural Disasters

Job Growth Decline + Peak Apartment Supply = Rent Growth Drop via Axiometrics

The correlation between job growth and effective rent growth is well-known. But if you needed further proof, it came in the most recent jobs numbers – not to mention the influx of new apartment supply, apartment rental data shows.

National year-over-year job growth was 1.6% in June, a moderation of 70 basis points (bps) since the cycle’s peak in February 2015. While job gains nationally and in several major metros are declining, only eight of the top 50 job-gain markets recorded slower annual job growth than the national average.

Read more...Axiometrics.com | Job Growth Decline + Peak Apartment Supply = Rent Growth Drop

Cap Rates: The Story’s in the Details via GlobeSt.com

The cap rate story for the first half of this year is in the details, rather than overarching trends. And that’s expected to be the case as well when transactions in the year’s second half are tallied up, going by the results of CBRE’s latest North America Cap Rate Survey.

The general outlook for cap rates and returns in the year’s second half is for stable pricing, according to the report accompanying this year’s survey. “However, the sentiment of survey respondents varied by property type, segment, class and metro-tier grouping. The consensus is that if rates do change in H2 2017, they are more likely to increase modestly.”

Read more...Cap Rates: The Story’s in the Details | GlobeSt.com

Long-Term Outlook for Rental Apartments Remains Positive via National Real Estate Investor

Many of the markets where developers have been doubling down on building new apartment units are likely to have enough renters to fill those apartments over the next decade or so, according to the latest research commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).

“The analysis suggests that 15 or so metros will lead the way on activity, and they are basically the same 15 or so spots that have accounted for about half of both demand and supply in the current economic cycle to date,” says Greg Willett, chief economist with real estate data firm RealPage Inc., which has reached similar conclusions to NHMC/NAA.

Read more...Long-Term Outlook for Rental Apartments Remains Positive

Dallas-Fort Worth Economic Indicators via Dallas Fed

The Dallas–Fort Worth economy strengthened in July. Job growth picked up, and expansion in the Dallas and Fort Worth business-cycle indexes accelerated. The unemployment rate fell in both metro areas. Home prices rose further in May, although the pace of appreciation decelerated. Existing-home sales increased in July, supported by an expanding DFW economy, and inventories remained tight at just above two months of supply.

Read moree...Dallas-Fort Worth Economic Indicators - Dallasfed.org

There are no more low-priced homes via CNBC

Sales of both newly built and existing homes fell unexpectedly in July, and while it's just one month's data, it may be a signal that the housing market has hit an insurmountable hurdle. It is just plain too expensive. Home prices are higher at virtually every price point, but the gains are biggest at the low end where demand is highest.

The median price of a home sold in July hit $258,300, the highest July price on record, according to the National Association of Realtors. The Realtors divide sales figures into six different price "buckets" in their monthly report. Sales in the range of $100,000 or below were down 14 percent compared with a year ago, while sales of million-dollar and higher homes jumped nearly 20 percent.

Read more...There are no more low-priced homes

A Close Look at Urban Core Apartment Market Performances via National Real Estate Investor

The U.S. apartment completion volume across the country’s 100 largest metros has accelerated to more than 80,000 units per quarter in 2017, up from around 60,000 units a quarter in the previous couple years. That aggressive new supply tally is creating a more competitive leasing environment for top-of-the-market product, especially in urban core settings where so many communities are coming on the market within blocks of each other.

Digging deeper into the story, urban core results obviously vary quite a bit from one spot to another due to factors that range from how many new apartments are being built to how many jobs are being added. Measuring health in terms of annual rent growth for new resident leases, results range all the way from spectacular—a 7 percent rent escalation in downtown Seattle—to dismal—a 5 percent rent loss in downtown Houston.

Read more...A Close Look at Urban Core Apartment Market Performances

Yardi: YOY Rent Growth Slips in July, but Rents Have Risen Every Month of 2017 via Multifamily Executive Magazine

From June 2017 to July 2017, average U.S. monthly rents rose by $1, to $1,350, according to Yardi Matrix’s Matrix Monthly survey of 121 markets. At the same time, year-over-year (YOY) growth rates fell, to 2.6%, down 10 basis points (bps) from June 2017. Actual rents are up by 2.7% this year to date and have risen every month this year.

Despite virtually flat sequential rent growth and slowdowns still to be expected, the multifamily market remains healthy overall.

Read more...Yardi: YOY Rent Growth Slips in July, but Rents Have Risen Every Month of 2017 | Multifamily Executive Magazine

Commercial, Multifamily Starts Fall 9% in First Half of 2017 via Multifamily Executive Magazine

In eight of the top 10 metropolitan markets, the dollar volume of commercial and multifamily construction starts decreased on a year-over-year basis, according to the latest Dodge Data & Analytics report, covering the first half of 2017. At the same time, nine of the next 10 metro markets (ranked Nos. 11–20) experienced start growth, indicating that smaller metro areas are “picking up the slack” from the deceleration under way in larger cities.

On the national level, commercial and multifamily starts totaled $87.5 billion in the first half of 2017, down 9% from the first half of 2016 but up 1% from the first half of 2015.

Read more...Commercial, Multifamily Starts Fall 9% in First Half of 2017 | Multifamily Executive Magazine

US Home Construction Slumped in July via US News

Homebuilders pulled back sharply on construction of apartment complexes in July, causing housing starts to tumble to a three-month low.

The Commerce Department said Wednesday that housing starts fell 4.8 percent in July to a seasonally adjusted annual rate of 1.16 million. Groundbreakings for multi-family buildings such as apartments slumped 17.1 percent, while single-family house construction slipped 0.5 percent.

Read more...US Home Construction Slumped in July | Business News | US News

Some Apartment Markets Are Facing Challenges via National Real Estate Investor

In a few overbuilt downtowns, apartment rents are starting to fall. But experts claim that demand for apartment units continues to be so strong, the trend won’t last for long.

“The story in these markets is the apartment story writ large: the high levels of apartment construction are not enough to house the 1.2 million or so new households formed each year without increased single-family construction,” says John Affleck, research strategist with the CoStar Group.

Read more...Some Apartment Markets Are Facing Challenges

As housing affordability weakens, more buyers are left out in the cold via CNBC

The cost of housing is rising at a fast clip, and nowhere is it more apparent than in the market for newly built homes.

Sales there are rising, but only on the higher end, and that is leaving the majority of entry-level buyers out of luck and out of home ownership because there are so few cheaper, existing homes for sale. While homebuilders claim they are trying to target the high demand from entry-level buyers, the numbers simply don't show that.

Read more...As housing affordability weakens, more buyers are left out in the cold

Texas Markets: Rent Growth Receding via ALN Apartment Data

Texas has repeatedly been in the top handful of states for absorption and occupancy over the last decade. So far in 2017, the absorption numbers are still holding up. The Lone Star State ranked first in absorption from July 2015 to July 2016 with a net gain of 36,000 rented units. In addition, Texas markets rank second only behind California for rental absorption, with a net gain of over 41,000 rented units from this time last year.

Effective Rent

Despite these rankings, effective rent growth has tapered off significantly from the middle of the decade.

Read more...Texas Markets: Rent Growth Receding - ALN Apartment Data

When Will Valuations Begin to Rise Again? via GlobeSt.com

With a potential debt-ceiling debate looming in the fall and further tightening actions by the Fed on the horizon, Ten-X’s chief economist Peter Muoio would not be surprised if prices continue to meander, he tells GlobeSt.com. The firm recently reported in its Nowcast that the commercial real estate sector continued its pricing slump in July, with nationwide commercial pricing declining by 0.3%.

Read more...When Will Valuations Begin to Rise Again? | GlobeSt.com

ALN Monthly Market Stats August 2017 via ALN Apartment Data

ALN Data just released their July 2017 market stats on occupancy and rents for over 80 markets. In Texas, it includes DFW, Austin, Houston, San Antonio, Lubbock, Amarillo, Abilene, Corpus Christi and more. It is a must read from a great provider of apartment data. Check out their new website.

Read more...ALN Monthly Market Stats August 2017 via ALN Apartment Data

D-FW apartment rent increases slowing via Dallas News

Apartment rents in the Dallas area are still rising -- but at a slower pace than a year ago.

Average monthly apartment rent in the Dallas area in July was $1,156 -- up 2.4 percent from a year earlier, according to a new report from Axiometrics. That's about the same as the national year-over-year percentage increase in rents.

Read more...D-FW apartment rent increases slowing | Real Estate | Dallas News

Dallas-Fort Worth has top two spots in U.S. based on 5-year economic forecast via Dallas News

Denton and Collin counties are projected to be the nation's fastest growing economies over the next five years, according to an Oxford Economics forecast.

Of the top six U.S. counties, four are in Texas:

Read more...Dallas-Fort Worth has top two spots in U.S. based on 5-year economic forecast  | Economy | Dallas News

Why Recycling Remains A Luxury Amenity In Texas via Bisnow

Granite countertops, infinity pools, recycling bins. One of these luxury apartment amenities is not like the others. Although renters are increasingly demanding recycling options, few multifamily owners are offering it. In Texas, one of the lowest-ranked states for waste diversion and reduction, recycling is largely viewed as a Class-A amenity, leaving many renters unable to put their waste anywhere but a landfill.

Read more...Why Recycling Remains A Luxury Amenity In Texas - Sustainability

Three Factors That Influence Apartment Turnover via MPF Research

Renter turnover is inevitable. Unless rents are absurdly cheap, people are going to come and go. It’s the nature of the multifamily industry.

But what does the turnover ratio tell us?

Turnover is a measure that defines whether a resident chooses to renew their lease or to move out. The terms “turnover” and “retention,” while opposing concepts, are often used interchangeably. Low resident retention indicates high turnover, and vice versa. All other things equal, the rent roll of an asset with high turnover will churn more often. But that’s not necessarily a bad thing.

Read more...Three Factors That Influence Apartment Turnover - MPF Research

More Real Estate Players Say the Peak Is Now via National Real Estate Investor

More than half of respondents to an NREI survey conducted in July said the real estate cycle has reached its peak. The percentage of survey respondents who believe we are currently at the peak of the market totaled 52 percent, up 500 basis points since the results in May of 2017 and 600 basis points since March results. The only time the figure was higher in the past two years was in October 2016, when it reached 55 percent

Read more...More Real Estate Players Say the Peak Is Now

Z Report: Revenue Growth to Continue Decelerating via Multifamily Executive Magazine

For the most part, this century’s multifamily revenue activity has moved in cycles as employment levels and new supply have fluctuated from year to year.

National multifamily revenue growth averaged 2.3% from 2000 to 2016, according to Axiometrics, with a recent low of -6.4% growth in 2009 and a recent high of 5.9% in 2006.

In the post-recovery period, the steady climb of employment growth has been the main driver of strong multifamily market fundamentals, which led to the strong levels of annual revenue growth recorded from 2010 to 2015. At that point, however, oversupply placed more pressure on rents, dropping growth down to 3.2% in 2016, reports Zelman & Associates in The Z Report.

Read more...Z Report: Revenue Growth to Continue Decelerating | Multifamily Executive Magazine

Apartment Slowdown Has Yet to Arrive via Multifamily Executive Magazine

The predicted apartment slowdown still has yet to impact the market. So proclaims Ten-X Commercial’s latest US Multifamily Outlook.

As GlobeSt.com's Paul Bubny reports, however, some aspects of the market are faltering—vacancies nationwide rose 10 basis points during the first quarter, to 4.3%, after remaining flat over the past year, and 330,000 new apartment units will be added to the inventory by the end of this year, which will have a negative impact on vacancies as the absorption rate lags the influx of new supply. The report's author predicts an economic downturn by 2020 as vacancies hit a forecasted 6.2%.

Read more...Apartment Slowdown Has Yet to Arrive | Multifamily Executive Magazine