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