Tighter Regulations Curb Lending via Multifamily Executive Magazine

There’s no disputing the growth in the multifamily market over the past few years. Cranes have been visible in big and small cities across the country and 2016 was the first year in a decade that more than 300,000 units were delivered, according to the National Multifamily Housing Council (NMHC), which says 300,000 to 400,000 units are needed each year to keep up with demand.

Read more...Tighter Regulations Curb Lending | Multifamily Executive Magazine

Yardi Matrix: Dominating Dallas via Commercial Property Executive

Hitting new cyclical peaks across most metrics, Dallas-Fort Worth continues to be one of the strongest multifamily markets in the United States. Following national trends, rent growth slowed down during the last two quarters of 2016. However, at 5.7 percent as of January, the metro’s growth rate topped the national average by 110 basis points, fueled by strong fundamentals across the board. With 114,000 new jobs in the year ending in November and ranked as the top U.S. metro in units under construction, DFW is perceived by developers and investors as a safe haven.

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Apartments Priced to Perfection via GlobeSt.com

The apartment sector has enjoyed the strongest and most consistent recovery since the recession. One fallout from the housing bust was a massive decline in homeownership, resulting in a surge in apartment absorption, as people shifted from owning to renting. The surge in demand resulted in plummeting vacancies and surging rents, even as demand in other property segments struggled in the face of the sluggish economic recovery, whetting investor appetite.

Read more...Apartments Priced to Perfection | GlobeSt.com

Slowed Job Growth Challenges Austin Fundamentals via MPF Research

Austin has been a national leader for job creation throughout much of the current economic cycle. But while the metro has added an impressive number of high-paying jobs across sectors in recent years, growth has started to slow significantly. The question looms as to whether the deceleration is cause for concern, particularly since tech companies embedded in Austin’s scenery have recently announced layoffs. Operators have taken note of the current slowdown, with some noting particular apprehension about future pricing strategies. In the short run, an oncoming supply wave could prove to be the largest obstacle to apartment fundamentals, as performance metrics continue to tumble from recent peaks.

Read more...Slowed Job Growth Challenges Austin Fundamentals - MPF Research

Yardi Matrix: Houston’s Shaky Economy via Multi-Housing News Online

Houston’s multifamily market is still reeling from the oil price collapse in 2015, which resulted in thousands of job cuts and slowing investment activity. Even though in-migration continues due to the metro’s growing economic diversity, its high quality of life and favorable cost of living, the rent growth outlook will remain clouded as the ample new supply gets absorbed.

Read more...Yardi Matrix: Houston’s Shaky Economy

Renters Now Rule Half of U.S. Cities via National Real Estate Investor

Detroit was once known as a city where a working-class family could afford to own a home. Now it’s a city of renters.

Just 49 percent of Motor City households were homeowners in 2015, down from 55 percent in 2009 and the lowest percentage in more than 50 years. Detroit isn’t alone, of course: The rate of U.S. home ownership fell steadily for a decade as the foreclosure crisis turned millions of owners into renters and tight housing markets made it hard for renters to buy homes. Demographic shifts—millennials (finally) moving out of their parents basements, for instance, or a rising Hispanic population—further fed the renter pool.

Fifty-two of the 100 largest U.S. cities were majority-renter in 2015, according to U.S. Census Bureau data compiled for Bloomberg by real estate brokerage Redfin.

Read more...Renters Now Rule Half of U.S. Cities

Houston Economic Indicators March 2017 via Dallas Fed

While uncertainties remain, a number of indicators point toward a stronger Houston economy in 2017. Service sector job growth is broad based, and business bankruptcy data and mining job growth suggest improvement in the oil and gas sector. Three major leading indicators are also sending positive signals. Overall, the outlook for Houston remains moderately positive.

Austin Economic Indicators March 2017 via Dallas Fed

The Austin economy expanded at a brisk pace in January. The Austin Business-Cycle Index rose slightly on strong January job growth and a continued low unemployment rate. The Bureau of Labor Statistics’ annual employment benchmark revision shows that Austin jobs grew at a much faster rate last year than originally estimated.

DFW Economic Indicators, March 2017 via Dallas Fed

The Dallas–Fort Worth economy expanded in January. Job gains were solid, and DFW continued to lead growth in other major Texas metros. Unemployment fell, and growth in the Dallas and Fort Worth business-cycle indexes accelerated in January. Single-family housing inventory remained tight. The DFW multifamily market ended 2016 on a strong note and is seeing sustained growth.

Bid-Ask Gap Grows in the Apartment Sector via National Real Estate Investor

The new year has brought some surprises for the apartment business. Investors are buying and selling far fewer apartment buildings.

“You are going to be shocked at the year-over-year declines in apartment deal volume into January,” says Jim Costello, senior vice president of New York City-based research firm Real Capital Analytics (RCA).

Far fewer deals closed in the apartment sector in both January and February compared to the year before. Buyers increasingly want higher yields on their investments. Sellers still insist on the high prices they believe their properties are worth and many are willing to refuse to sell rather than accept a lower bid.

Read more...Bid-Ask Gap Grows in the Apartment Sector

ALN Monthly Newsletter March 2017 via ALN Apartment Data

ALN Data just released their February 2017 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.

Read more...ALN Monthly Newsletter March 2017 via ALN Apartment Data

Matrix Monthly: February Rent Growth Scores Love-Love via Multi-Housing News Online

As the first quarter of 2017 is on its way out, average U.S. rent growth stayed stagnant during the month of February, according to Yardi Matrix’s monthly report of 124 markets. Remaining at an average of $1,306, it seems that the long-anticipated deceleration of rent growth has begun to take its course. On a year-over-year basis, rents increased 2.8 percent nationwide, a 40 basis-point drop from January’s figures.

Read more...Matrix Monthly: February Rent Growth Scores Love-Love

Yardi Matrix: Dominating Dallas via Multi-Housing News Online

Hitting new cyclical peaks across most metrics, Dallas-Fort Worth continues to be one of the strongest multifamily markets in the United States. Following national trends, rent growth slowed down during the last two quarters of 2016. However, at 5.7 percent as of January, the metro’s growth rate topped the national average by 110 basis points, fueled by strong fundamentals across the board. With 114,000 new jobs in the year ending in November and ranked as the top U.S. metro in units under construction, DFW is perceived by developers and investors as a safe haven.

Read moore...Yardi Matrix: Dominating Dallas

Yardi Matrix: Cooling Rents—Austin’s City Limits via Multi-Housing News Online

Austin’s multifamily market continues to be a hotbed of activity, despite a growing sense of caution that rents and development are beginning to decelerate. Economic and population growth are creating strong demand for multifamily. Employment is also expanding, especially in technology; education and health care; trade, transportation and utilities; and construction. These sectors entice young professionals, many of whom are relocating. However, the market faces challenges, foremost affordability and supply growth.

Read more...Yardi Matrix: Cooling Rents—Austin’s City Limits

Price Growth on Commercial Assets Is Showing Signs of Petering Out via National Real Estate Investor

Price increases for U.S. commercial real estate assets have started to moderate in recent months, perhaps as a result of the expectation of rising interest rates. The all-property CPPI put together monthly by ratings agency Moody’s and research firm Real Capital Analytics (RCA) rose by just 0.1 percent in January, the most recent month for which data is available. The apartment sector continued to outperform during the period, posting the biggest upward jump in the index of any property type, at 0.9 percent. Office buildings in Central Business Districts (CBDs) experienced the biggest drop in prices, at 1.9 percent.

Read more...Price Growth on Commercial Assets Is Showing Signs of Petering Out

DFW Relocation Machine Keeps Motoring Along via GlobeSt.com

With 21 of the 51 Fortune 500 Texas corporate headquarters located in Dallas-Fort Worth, the metroplex is the fourth highest-ranking headquarters metro area behind New York, Chicago and Houston, says CBRE in a recent report. In addition, 72 major companies have moved corporate headquarters to Dallas since 2010, according to Dallas mayor Mike Rawlings.

DFW is a dense cluster of corporate operations that proliferated even more so during the current expansion cycle that began shortly after the Great Recession. However, before that, the stage was set for a relocation explosion.

Read more...DFW Relocation Machine Keeps Motoring Along | GlobeSt.com

Rents Flat in February via Multifamily Executive Magazine

There wasn’t much movement in February with respect to average U.S. monthly rents. The metric held steady at $1,306 last month, according to Yardi Matrix’s monthly survey of 124 markets.

On a year-over-year (YOY) basis, rents were up 2.8% nationwide in February, down 40 basis points from January and roughly half the 5.5% growth rate of a year ago. Despite some fluctuation in between, rents are the same as they were in July 2016.

Read more...Rents Flat in February | Multifamily Executive Magazine | Rent Trends, Rents, Research, Rental Market

The Dynamic Between Apt. Supply and Rent Growth via GlobeSt.com

What we’re seeing on a national basis is multifamily absorption remaining at robust levels, but a roughly equal amount of supply additions, Ten-X Research’s senior quantitative strategist Chris Muoio tells GlobeSt.com. According to the firm’s February Nowcast, the apartment sector once again recorded the strongest growth among all five CRE sectors, as pricing gained 1.4% in February. The sector has been a consistent standout of pricing strength, and is now up 16.6% over the past year.

Read more...The Dynamic Between Apt. Supply and Rent Growth | GlobeSt.com

Big D Pulls in Big Absorption, Nation’s Largest via GlobeSt.com

Dallas/Fort Worth had the highest amount of office absorption of any US metro at nearly 5.3 million square feet in 2016. CBRE Research examines the recent US office sector rankings and how markets in the Lone Star State matched up. Texas claimed two of the top 10 highest metros for absorption and annual rent growth last year. In addition to DFW, Austin ranked eighth on the list. Houston’s supply in sublet availability came in first in the nation for the highest volume of sublease availability at 11.1 square feet, according to CBRE Research.

Read more...Big D Pulls in Big Absorption, Nation’s Largest | GlobeSt.com

Apartment Demand Drives Performance in Dallas/Fort Worth via MPF Research

Dallas/Fort Worth has absorbed more units during this economic cycle than what’s in the entire apartment stock of many markets. The big demand numbers in North Texas pushed occupancy to an all-time high in the second half of 2016, spurring rent growth to levels well beyond the previous cycle’s peak. A big factor in the Dallas/Fort Worth demand figures has been construction activity. As builders have brought more product, renters have filled it. But as construction remains at levels not seen since the 1980s, what impact will supply have on the market going forward? MPF Research economists discuss the Dallas/Fort Worth outlook in this edition of Apartment Market Dynamics.

Read more...Apartment Demand Drives Performance in Dallas/Fort Worth - MPF Research

What Challenges Lie Ahead for the Lone Star State? via GlobeSt.com

s Texas’ economy settles into 2017, the commercial real estate sector is hoping to maintain its stride despite unstable international and domestic market conditions. This is accentuated by the fact that Texas is top in the nation for warehouse construction and the sector supports almost 388,000 jobs and contributes $23 billion to the state’s economy, according to John T. Baird and Sullivan Johnston in an exclusive Avison Young analysis.

Read more...What Challenges Lie Ahead for the Lone Star State? | GlobeSt.com

RCA: Transaction Volume Falls Back in January via Multifamily Executive Magazine

Following an extraordinarily high level of apartment transaction volume in 2016, deal volume fell by a staggering 63% year over year (YOY) in January, on sales of $6.7 billion, according to the most recent US Capital Trends report by RCA Capital Analytics. Last month's multifamily deal volume is, so far, consistent with volume figures recorded in January 2014.

The 91% YOY drop in portfolio and entity-level transactions, from $8.6 billion in January 2016 to $769 million in January 2017, accounts for a large portion of the overall decline. Single-asset sales also fell, 37% YOY, on a volume of $6.0 billion, following a 27% YOY drop in December. Single-asset slowdowns on this scale suggest “a growing sense of caution and uncertainty in the market,” according to RCA, but, thus far, the deceleration hasn't had an effect on property pricing.

Read more...RCA: Transaction Volume Falls Back in January | Multifamily Executive Magazine

Interest Rate Hikes May Have More Impact on Deal Volume Than Cap Rates in 2017 via National Real Estate Investor

Interest rate increases in 2017 are expected to have less of an effect on cap rates than originally predicted, with experts forecasting that the current flat cap rate environment will continue. In this environment, sources say investors should instead watch out for the effects that interest rate increases will have on deal volume.

Last year, investment activity levels of foreign buyers stemmed the effects that interest rate increases had on the market, so that cap rates either remained stable or increased slightly in the second half of 2016, according to CBRE’s second half 2016 Cap Rate Survey. Research done by real estate data firm Real Capital Analytics (RCA) also determined that across all asset types, cap rates remained generally flat in 2016 despite uncertainty in the market.

Read more...Interest Rate Hikes May Have More Impact on Deal Volume Than Cap Rates in 2017

‘Stormier Waters’ Ahead for Investment? via GlobeSt.com

The past year ended on an upbeat, as commercial real estate transaction activity posted its second consecutive quarterly increase, Ten-X says in its latest Commercial Real Estate Capital Trends report. However, the firm cautions against expecting the upward trajectory to continue indefinitely.

“For years, a slowly expanding economy has been a boon to commercial real estate, driving unprecedented periods of growth in many areas of the market,” says Peter Muoio, chief economist with Ten-X. “After years of smooth sailing, however, the industry could be headed for stormier waters.”

Read more...‘Stormier Waters’ Ahead for Investment? | GlobeSt.com

Eleventh District Beige Book 3/1/17 via Dallas Fed

Economic activity in the Eleventh District expanded moderately over the past six weeks. Manufacturing demand strengthened, and activity among nonfinancial services firms increased. Retail sales generally rose, although there were some reports of weakness. Housing demand was solid, with gains in home sales. Loan demand increased, and the energy sector improved modestly. The agricultural sector improved thanks to favorable weather and rising crop and cattle prices. Employment and wages increased, as did prices. Outlooks generally improved.

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