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

If You Rent, Your Troubles Are Coming to an End via Bloomberg

Renters can finally breathe a sigh of relief: The nation's decade-long shift away from homeownership -- which had made renting exorbitantly expensive -- appears to be over. This will be great for builders and real-estate agents, but not so much for prospective home buyers.

Why do I think we've witnessed a generational peak in renting?

Read more...If You Rent, Your Troubles Are Coming to an End - Bloomberg

NAA and RealPage Release the 2017 Market Momentum Q2 Report via Property Management Insider

The hottest markets for investing, rent performance and resident retention have been announced in the National Apartment Association’s Market Momentum Report, produced in partnership with RealPage. The Market Momentum Report is a survey of industry decision-makers about business plans, expectations and trends in the apartment housing industry.

Read more...NAA and RealPage Release the 2017 Market Momentum Q2 Report

Houston Economic Indicators August 2017 via Dallas Fed

June data were generally positive for Houston, pointing toward a healthy economy. The metro business-cycle index expanded at its historical average pace, employment growth was very strong and job ads continued to climb. Construction data were less optimistic. Single-family housing activity was steady, but commercial activity and construction employment were down.

D-FW commercial building starts slid in first half of 2017 via Dallas News

New commercial building starts in Dallas-Fort Worth took a plunge in the first half of the year.

During the first six months of 2017, D-FW ranked eighth nationally among the biggest commercial building markets.

D-FW developers started $3.2 billion in commercial projects in the first half of the year, compared with $10.5 billion in New York and $4.4 billion in LA -- the top two U.S. markets.

Read more...D-FW commercial building starts slid in first half of 2017 | Real Estate | Dallas News

Austin Economic Indicators August 2017 via Dallas Fed

Growth in the Austin economy remained moderate in June. The Austin Business-Cycle index continued to grow near its long-term trend, as jobs were weak, but the unemployment rate fell to its lowest level since the end of the tech boom in 2001. Housing-market indicators were strong, and manufacturing activity continued to expand at a healthy pace.

Texas Economy Improves Further via Dallas Fed

The Texas economy is continuing to grow at a solid pace. Employment rose in June, and both manufacturing and service activity expanded, exceeding last year’s index averages, according to the Dallas Fed’s Texas Business Outlook Surveys (TBOS). However, growth in the energy sector slowed as oil prices fell. Nevertheless, increased activity in export-related manufacturing firms mitigated some of the deceleration in energy-related manufacturing.

Read more...Texas Economy Improves Further - Dallasfed.org

Apartment Vacancy Rates Expected To Increase More Slowly Than Expected via GlobeSt.com

Nothing, it seems, can dent the growth story that is multifamily. Despite a pipeline that is expected to peak in the second half of this year and remain elevated into 2018, Freddie Mac believes that while vacancy rates will increase, they will do so more slowly than expected. “Employment growth is expected to remain near 2016 growth levels and demand for multifamily units to stay strong due to lifestyle preferences and demographic trends,” it explains in its mid-year outlook for the category.

Indeed, forecasts of higher wage growth is expected to spur even more housing demand, it said.

Read more...Apartment Vacancy Rates Expected To Increase More Slowly Than Expected | GlobeSt.com

Monthly Review of the Texas Economy July 2017 via Real Estate Center

The Texas economy is recovering from the 2014–16 oil price collapse and is leading the U.S. in job creation.

According to the Real Estate Center's latest Monthly Review of the Texas Economy, Texas gained 319,300 nonagricultural jobs from June 2016 to June 2017, an annual growth rate of 2.7 percent, higher than the nation's employment growth rate of 1.6 percent. The nongovernment sector added 283,800 jobs, an annual growth rate of 2.8 percent, higher than the nation's employment growth rate of 1.7 percent in the private sector.

Read more...Monthly Review of the Texas Economy - Real Estate Center

CRE Loan Volume Up 20% Year-Over-Year via GlobeSt.com

Second-quarter commercial and multifamily mortgage loan originations were 20% higher than during the same period last year and up 28% over Q1 of 2017, the Mortgage Bankers Association said Tuesdays. The results of MBA’s latest Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations compared favorably with Q2 results over the past few years.

Read more...CRE Loan Volume Up 20% Year-Over-Year | GlobeSt.com

Dallas-Fort Worth construction is slowing from recent highs via Dallas News

here are more signs that the building boom is peaking in North Texas.

A new report by construction analyst Dodge Data & Analytics showed plans for most types of building projects were down significantly at midyear in the Dallas-Fort Worth area.

Read more...Dallas-Fort Worth construction is slowing from recent highs | Real Estate | Dallas News

Pullback Continues in the Investment Sales Market for Apartment Properties via National Real Estate Investor

Investors spent a lot less money on apartment properties so far this year compared to 2016, but prices in the sector keep rising anyway.

Prices for mid-rise and high-rise properties inched up 1.0 percent year-over-year, and prices for garden-style apartment properties grew 10.0 percent in the second quarter of 2017, according to the Real Capital Analytics Commercial Property Price Index (RCA CPPI).

Read more...Pullback Continues in the Investment Sales Market for Apartment Proper