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