RCA: Apartment Deal Volume Falls 35% in 1Q via Multifamily Executive Magazine

Apartment deal volume fell by 35% year over year (YOY), on sales of $26.0 billion, in the first quarter of 2017, according to the latest U.S. Capital Trends report by RCA Capital Analytics. This drop is the sharpest YOY decline this quarter across all property market sectors. As of this report, the multifamily market is the nation’s No. 2 real estate investment market, behind the office sector.

Despite this drop in volume, apartment investment activity is still ahead of the $17.0 billion average pace set in the first quarters of 2001 through 2016, and prices remain tight.

Read more...RCA: Apartment Deal Volume Falls 35% in 1Q | Multifamily Executive Magazine

DFW Economic Indicators, April 2017 via Dallas Fed

The Dallas–Fort Worth economy expanded in March, with payroll employment rising an annualized 2.0 percent. In the first quarter, DFW employment gains outpaced the state and national growth rates. Dallas and Fort Worth business-cycle indexes also posted strong growth in March, and unemployment edged down in both metros. Single-family housing permits rose further, in part supported by strong job and population growth in the metroplex.

Garden Style Apartment Communities Outperform the Market via National Real Estate Investor

In garden apartment communities across the country, the average rents are rising quickly and occupancy rates are high.

“It’s a really attractive type of development to own and operate,” says Greg Willett, chief economist for MPF Research, a division of RealPage Inc.

But developers are building far fewer garden apartment complexes than they used to. The large sites used to build these low-density rental communities are getting harder to find. As a result, garden apartment complexes have relatively little competition in their price range. So even though they are often based in locations that are far from the walkable, urban neighborhoods where renters say they want to live, garden apartments communities are often fully occupied and are experiencing rent growth.

Read more...Garden Style Apartment Communities Outperform the Market

ULI Forecast Calls for Moderate Growth for Most U.S. Real Estate Sectors via Urban Land Magazine

While the growth of e-commerce and the shifting needs for open and smaller office spaces are having a marginal impact, most of these disruptive forces are still years away from having a substantive negative impact on the retail, office, and other industry sectors, said panelists discussing the latest ULI Real Estate Consensus Forecast during a webinar. While each sector faces its own challenges, “real estate remains an attractive play,” said K.C. Conway, senior vice president of credit risk management for SunTrust Bank.

The forecast, which polled 53 economists and analysts, reflected a distinct “restrained optimism,” ULI leader and survey participant William Maher, director of North American strategy and research at LaSalle Investment Management, noted in a statement. Despite concerns, most markets will continue to grow at a moderate rate for the next two years, respondents said.

Read more...ULI Forecast Calls for Moderate Growth for Most U.S. Real Estate Sectors - Urban Land Magazine

ALN Monthly Newsletter April 2017 via ALN Apartment Data

ALN Data just released their March 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 April 2017 via ALN Apartment Data

Renters Say Down Payment Costs Prevent Home Purchases via Multifamily Executive Magazine

Nearly 70% of renters say they can’t buy a home due to the expensive down payment, despite the fact that a monthly mortgage payment might be cheaper than rent, according to the first Zillow Housing Aspirations Report, released Wednesday.

Two-thirds (67.9%) of renters nationwide cite saving for a down payment as the biggest hurdle to buying a home; 53.2% also mention qualifying for a mortgage as an obstacle; 50% say debt is holding them back; and 38.5% call out job security.

Read more...Renters Say Down Payment Costs Prevent Home Purchases | Multifamily Executive Magazine | Rent Trends, Home Prices, Rent vs. Own

Eleventh District Beige Book 4-19-17 via Dallas Fed

Economic activity in the Eleventh District expanded moderately over the past six weeks, with a slight acceleration from the prior reporting period. Manufacturing output strengthened further, and activity among nonfinancial services firms increased. Retail sales rose at a somewhat faster clip, including a pickup in auto sales. Home sales rose during the reporting period, although apartment demand slowed slightly. Loan demand strengthened and the energy and agricultural sectors improved. Employment and wages increased moderately, as did prices. Outlooks generally improved, with most contacts expecting 2017 to be stronger than 2016.

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

What Could Throw Apts. Off Course? via GlobeSt.com

Like all commercial real estate, the apartment market is vulnerable to a rise in interest rates. Cap rate spreads have fallen in the last few months to offset the gains in rates, but that cannot last forever, Ten-X’s senior quantitative strategist. Chris Muoio tells GlobeSt.com. As we previously reported, according to the firm’s March Commercial Real Estate Nowcast. the apartment sector posting a 1.2% gain in pricing during March—the strongest growth among any of the five CRE sectors.

We spoke with Muoio about the factors that make apartment investment so strong and whether or not the sector is iron-clad at this point.

Read more...What Could Throw Apts. Off Course? | GlobeSt.com

Apartment Vacancy Rate “Wobbling,” But Not Rising via National Real Estate Investor

Construction cranes crowd the skies over cities like New York and Los Angeles, as apartment developers build as many new units as they can. But strong demand for apartments continues to fill most new properties.

“New apartment construction has been robust across the U.S., yet occupancy growth has moved in step with supply growth,” says Barbara Byrne Denham, senior economist with research firm Reis Inc. “Construction is expected to be higher this year, but thus far, absorption has kept pace.”

Overall, the percentage of vacant apartments continues to wobble in the 4.0 percent range.

Read more...Apartment Vacancy Rate “Wobbling,” But Not Rising

D-FW apartment boom shows no sign of a slowdown with 50,000 plus units on the way via Dallas News

Dallas-Fort Worth was already the top apartment building market in the country before starts increased by more than 95 percent in the first two months of 2017.

Thousands more apartments are on the way in North Texas.

While analysts say that the spike in apartment construction in the early months was a fluke, don't look for a halt of apartment building in the D-FW area.

Read more...D-FW apartment boom shows no sign of a slowdown with 50,000 plus units on the way | Real Estate | Dallas News

South, West Metros Lead for Population Growth in 2016 via MPF Research

Spring is in the air, and that can mean only one thing: new Census population estimates, of course. The Census Bureau just released their eagerly anticipated (among a certain set) population estimates for 2016. Of particular interest is the year-over-year population change among U.S. metros, which helps shed some light on a few apartment market trends over the last year.

Read more...South, West Metros Lead for Population Growth in 2016 - MPF Research

More Renters Expect to Keep On Renting via GlobeSt.com

Trading a rental for the dream of homeownership? Not so fast, according to the latest Freddie Mac survey of renters. An even larger majority of those surveyed said they expect to rent their next home: 59%, up from 55% six months ago.

Not surprisingly, the biggest gains in this cohort were seen among younger Millennials, for whom homeownership may be a foreign concept. Seventy-three percent of those surveyed said they planned to rent their next home, compared to 64% in September 2016. Another group that registered a preference for staying in the renter pool was suburban households, up from 48% six months ago to 57% in the most recent Freddie survey.

Read more...More Renters Expect to Keep On Renting | GlobeSt.com

New from MPF Research: Apartment Occupancy, Employment Growth via Property Management Insider

Multifamily occupancy dropped, especially in the luxury product segment, with a wave of new supply coming online during the colder months, when leasing activity is seasonally slow.

A 1st quarter 2017 report draws on data from RealPage’s Axiometrics and MPF Research to evaluate those supply-demand fundamentals.

The new findings also reveal the top 12 metros for pricing power. Sacramento and Seattle lead the regionally diverse rankings, registering respective annual rent growth of 9.8% and 7.9% for the period.

Read more...New from MPF Research: Apartment Occupancy, Employment Growth

Austin Economic Indicators April 2017 via Dallas Fed

Austin continued its economic expansion in February, albeit at a slower pace. The Austin Business-Cycle Index softened and grew below its long-term average. Job growth slipped, and the unemployment rate rose notably, although it remains the lowest among Texas’ major metro areas. Population growth remains strong in Austin, suggesting that despite a very low unemployment rate, the metro is likely to continue to have the workers to support healthy job growth in 2017.

D-FW apartment starts soar more than 95 percent in first two months via Dallas News

Seems like forever I've been quoting folks that the pace of apartment building in North Texas is sure to slow soon.

I wouldn't count on that.

During the first two months of 2017, developers started building almost twice as many apartments in the Dallas-Fort Worth area as they did in the same period of last year, according to data from MPF Research and the U.S. Census Bureau.

Read more...D-FW apartment starts soar more than 95 percent in first two months | Real Estate | Dallas News

Yardi: Rent Gains Return in March, but Growth Continues to Moderate via Multifamily Executive Magazine

March’s $6 gain marked the first positive change in the average U.S. monthly rent in five months and the most significant gain since last June, according to Yardi Matrix’s Matrix Monthly rent survey report. The average U.S. monthly rent is now $1,312, according to the firm's monthly survey of 121 metro markets.

On a year-over-year (YOY) basis, rents rose 2.7% in March, down 10 basis points (bps) from February and 270 bps from one year ago, when the YOY rent-growth rate was twice as high, at 5.4%.

Read more...Yardi: Rent Gains Return in March, but Growth Continues to Moderate | Multifamily Executive Magazine

Reis: Rent-Growth Deceleration Continues in 1Q '17 via Multifamily Executive Magazine

The average U.S. apartment asking rent grew 0.4% in the first quarter of 2017, up to $1,315, and by 3.3% on a year-over-year (YOY) basis since the first quarter of 2016, according to Reis’1Q 2017 Apartment Sector Preliminary Trends Release. The research firm’s findings mark a significant deceleration in rent growth from the pace seen one year ago, when YOY rent growth exceeded 5%.

Effective rents, meanwhile, have grown 0.3% in the past quarter and 3.1% YOY. Reis’ Barbara Denham attributes the growing divide between asking and effective rents to the increasing use of concessions to attract and secure occupants.

Read more...Reis: Rent-Growth Deceleration Continues in 1Q '17 | Multifamily Executive Magazine

Houston Economic Indicators April 2017 via Dallas Fed

The oil and gas sector has turned positive, bringing Houston’s goods-producing sector out of contraction and into growth. The business-cycle index—the broadest measure of the metro area’s trajectory—is pointing to steadily improving but below-trend growth. Taken together, recent indicators continue to support a modestly positive outlook for Houston.

Houston’s Shaky Economy via Commercial Property Executive

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...Houston’s Shaky Economy

Uncertainty Weighs on Apartment Lending Sector via National Real Estate Investor

Just when lenders and borrowers thought interest rates would finally start to rise in 2017, interest rates stopped going up. Lenders are struggling to adapt. But they keep on lending.

“Between prospects of deregulation, global political uncertainty and the possibility of significant rate hikes, lenders and borrowers are acting with more caution,” says Justin Bakst, director of capital markets at research firm CoStar. “We see more activity in interest rate derivatives to hedge against rising rate risk. In addition, lenders are taking an active role in evaluating markets and submarket fundamentals and pricing risk accordingly.”

Read more...Uncertainty Weighs on Apartment Lending Sector

DFW Economic Indicators, March 28, 2017 via Dallas Fed

The Dallas–Fort Worth economy moderated in February, with payroll employment contracting and unemployment ticking up during the month, similar to the pattern seen at the state level. Looking at the two-month period, employment growth was strong at 4.2 percent. Dallas and Fort Worth business-cycle indexes also decelerated in February, though growth remained positive. The DFW housing market remained solid, with house price gains outstripping those nationally.

Economy Watch: Ten-X Reports CRE Prices Leveling Off via Commercial Property Executive

Nationwide commercial property valuations grew by 0.1 percent during March, and have climbed just 0.5 percent since November, according to the latest Ten-X Commercial Real Estate Nowcast, released late last month. According to Ten-X, pricing across commercial real estate rose 8.4 percent over the last 12 months, although the robust growth that characterized most of 2016 largely dissipated around the time of the election and Federal Reserve interest rate hikes.

Read more...Economy Watch: Ten-X Reports CRE Prices Leveling Off