Which Apartment Residents Are Most Affected by Job Losses? via National Multifamily Housing Council

Millions of Americans have filed for unemployment insurance since the outbreak of COVID-19 in mid-March, resulting in four consecutive months of double-digit unemployment rates (the U.S. unemployment rate improved to 8.4 percent in August). But not all industries have been affected equally.

In this issue of Research Notes, we identify which occupations have faced the most significant job losses during to the COVID-19 pandemic and, of those, which employ the greatest number of apartment residents. We also examine what metro areas have the highest concentrations of apartment residents in affected occupations.

Read more...Which Apartment Residents Are Most Affected by Job Losses? via National Multifamily Housing Council

Dallas-Fort Worth Economic Indicators September 2020 via Dallas Fed

The Dallas–Fort Worth economy expanded in August. Payrolls rose strongly, and the unemployment rate dipped further; however, the recovery has been uneven across sectors. Initial unemployment claims also continued their downward trend but remained elevated. The Dallas and Fort Worth business-cycle indexes rose. Homebuilding activity reversed course, rising strongly in the summer. Apartment rent collections in the first three weeks of September slightly trailed year-earlier levels.

Read more...Dallas-Fort Worth Economic Indicators September 2020 via Dallas Fed

Houston Economic Indicators September 29, 2020 via Dallas Fed

Indexes of economic activity for Houston continued to show growth over the second half of the summer thanks to a boost from the services sector. However, the pace of the recovery in the region has slowed, due mostly to ongoing weakness in the energy sector that is weighing down Houston’s recovery relative to Texas and the nation. Taken together, these data suggest that while Houston’s recovery is likely to continue, it will lag the state.

Read more... Houston Economic Indicators September 29, 2020 via Dallas Fed

Dallas-area apartment building permits are down via Dallas Morning News

The Dallas area had the largest drop in permits for new apartments of any of the 10 largest U.S. markets.

But the local decline was significantly less than the nationwide fall off in multifamily building permits in August compared with a year ago, U.S. census figures show.

Read more...Dallas-area apartment building permits are down via Dallas Morning News

Rent Payment Struggles Continue via Multi-Housing News

More than six months into the coronavirus pandemic, multifamily trade groups and advocates are worried about the cascading effects of falling rent payments.

While some reports have found that collections haven’t dropped as drastically as many had feared, numbers are still down from the same time last year. And with federal rent relief measures stalled in Congress, the expiration of additional unemployment benefits and continued job losses across the country, industry leaders fear the worst is yet to come.

Read more...Rent Payment Struggles Continue via Multi-Housing News

Low Interest Rates Still Aren’t Moving the Needle for CRE Buyers via GlobeSt

Interest rates may be at record lows, but that is not enough to spark CRE sales activity.

Normally, low interest rates would stimulate commercial real estate investment, but that isn’t the case in 2020, according to Real Capital Analytics.

RCA’s US Capital Trends shows that these low rates have not resulted in new acquisitions. National sales activity fell 68% year-over-year in August. Transactions are down 36% for the year to date.

Read more...Low Interest Rates Still Aren’t Moving the Needle for CRE Buyers via GlobeSt

Apartment rents sliding in Dallas and other markets via Dallas Morning News

Apartment rents are sliding in many U.S. markets — including the Dallas area — as landlords offer concessions to lure tenants.

Rental communities around the country have come under increasing pressure during the COVID-19 outbreak but so far have not suffered significant declines in occupancy, according to a report from RealPage.

Read more...Apartment rents sliding in Dallas and other markets via Dallas Morning News

Homeownership Becomes Less Affordable for Average Workers via GlobeSt

In spite of wage growth and a decline in mortgage rates, other market factors are placing home ownership out-of-reach for many Americans than ever before.

Sharp increases in single-family home prices are moving faster than increasing wages and historic dips in mortgage rates, according to ATTOM Data Solutions. As a result, a greater percentage of wages is needed to buy a home, and affordability has decreased in a large swath of the nation.

Read more...Homeownership Becomes Less Affordable for Average Workers via GlobeSt

'A 3,000% increase in activity’: Commercial real estate listings rise as D-FW owners leave the sidelines via Dallas News

Warehouses at DFW International Airport, landmark buildings in downtown Dallas, Uptown high-rises — the list of major properties just listed for sale is growing.

During the early months of the COVID-19 pandemic, commercial property sellers headed for the sidelines. Now that the local economy is starting to rebound, more investment properties are coming up for sale.

Read more...'A 3,000% increase in activity’: Commercial real estate listings rise as D-FW owners leave the sidelines via Dallas Morning News

Landlords Report a 75% Rise in Evictions Since the Start of COVID-19 via Multifamily Executive Magazine

More than half of residential tenants are currently struggling to pay their rent, largely as a result of the COVID-19 pandemic, according to a new survey of property managers released by real estate technology company Snappt. One-quarter of these residents are paying late, while 17% pay less than full rent and 11% have stopped paying altogether.

Respondents to the 2020 Effects of the COVID-19 Pandemic on Residential Rentals Survey reported that evictions have risen by 75% since the start of the COVID-19 pandemic, with a current eviction rate of 21%.

Read more...Landlords Report a 75% Rise in Evictions Since the Start of COVID-19 via Multifamily Executive Magazine

Texas Economy Improves Despite Lagging Sectors as COVID-19 Cases Decline via Dallas Fed

Continued growth is projected for the rest of the year, but it may be somewhat restrained by the expiration of federal stimulus programs and election uncertainty. Small-business closures may accelerate if the economy doesn’t strengthen sufficiently.

Risks to the outlook are to the downside and include a possible resurgence of the virus and sustained lower oil prices. Early arrival of a safe and effective COVID-19 vaccine would be a game changer, although it would take time for broad dissemination and administration.

Read more...Texas Economy Improves Despite Lagging Sectors as COVID-19 Cases Decline via Dallas Fed

Renters more pessimistic than homeowners during economic downturn via Real Estate Center

The Census Bureau has released phase two of its Household Pulse Survey (HPS) after a month-long hiatus. This round includes new questions regarding respondent sentiments on the likelihood of either eviction or foreclosure.

Throughout the summer, the HPS revealed a stark difference in optimism between homeowners and renters. Texas homeowners typically felt more likely to be able to make their next housing payment than renters.

Read more...Renters more pessimistic than homeowners during economic downturn via Real Estate Center

Apartment Leasing Rebounds to Normal Levels via GlobeSt

The pandemic immediately impacted apartment leasing activity, but about six-weeks into the pandemic, leasing activity rebounded to normal levels. Quarantine, distance learning and work-from-home policies encouraged people to move to more accommodating homes, driving leasing demand. However, the leasing process has changed since the onset of the pandemic, and those changes—virtual leasing—will take longer to return to normal.

Read more...Apartment Leasing Rebounds to Normal Levels via GlobeSt

How Some Multifamily Metrics Can Mislead in This Current Environment via GlobeSt

As a provider of joint venture and general partner equity, real estate investment firm RanchHarbor has been seeing an influx lately of multifamily investment opportunities presented by sponsors as value-add. However, upon a closer look at the underwriting, these deals do not actually fit the typical value-add investment profile, says Adam Deermount, co-founder and managing director of the company. Instead, these opportunities end up being cap rate compression plays under the guise of value-add and are priced to perfection in today’s market.

“Most of the return on investment is generated by rent inflation buoyed in the early years of the investment by positive debt service arbitrage due to interest only terms,” Deermount tells GlobeSt.com.

Read more...How Some Multifamily Metrics Can Mislead in This Current Environment via GlobeSt

We Are Living in the Weirdest Real Estate Market Ever via D Magazine

Nothing is normal in this year of the pandemic. That includes Dallas’ housing market, which is hot in a really strange way. One real estate agent describes the situation as “a near frenzy.” Another calls it simply “weird.”

Back in early March, it was neither. It was normal. Houses were selling at a brisk pace. The market wasn’t as hot as it was in, say, 2016, but sellers were still making a buck and buyers had to work to find a deal. Then the coronavirus arrived.

Read more...We Are Living in the Weirdest Real Estate Market Ever via D Magazine

Top Texas Metros for Multifamily Development in 2020 via Multi-Housing News Online

The Texas job market performed strongly before the onset of the pandemic, with all three of its major markets showing up across rankings related to economic and demographic development. This created substantial demand for apartments, pressuring developers to keep up. Land availability, a friendly business climate, good weather and a high quality of life, all contributed to the rapid expansion of the state’s rental market.

Read more...Top Texas Metros for Multifamily Development in 2020 via Multi-Housing News Online

The Strain on Apartment Renters Intensifies as Pandemic Wears On via GlobeSt

The strain on apartment renters is increasing as the pandemic continues. Research from Apartment List found that more than 30% of apartment renters in the US owed back rent payment in September. The number was nearly unchanged compared from August. About half of renters owe less than $1,000 and only 5% owe more than $2,000; however, the report suggests that another round of stimulus checks would be helpful if not necessary to help renters settled these debts and to help landlords recoup losses.

Read more...The Strain on Apartment Renters Intensifies as Pandemic Wears On via GlobeSt

Freddie Mac Multifamily Index Turns Negative via GlobeSt

The Freddie Mac Multifamily Apartment Investment Market Index fell by 0.3% in the second quarter, after posting a quarterly increase of 1.8% in the first quarter of 2020. NOI also fell, by 1.2%, marking the first time in index history where AIMI and NOI were negative together in the second quarter.

AIMI combines multifamily rental income growth, property price growth and mortgage rates to provide a single index that measures multifamily market investment conditions.

Read more...Freddie Mac Multifamily Index Turns Negative via GlobeSt

Adjustments in Pricing Lag a Decline in Property Values via NREI

One thing that buyers and sellers can agree on these days is that there has been a reset in property values across many sectors and geographic markets. Yet the sticking point that continues to stall transactions is determining exactly how much of a discount should be applied.

Pricing is relatively transparent when the market is gliding along with stable conditions, which makes it which makes it easy to gauge values.

Read more...Adjustments in Pricing Lag a Decline in Property Values via NREI

Lenders Appetite for Commercial Property Debt Dwindles via GlobeSt

Commercial property activity has declined substantially this year, but it isn’t for lack of demand. Cash equity seeking commercial property deals is at an all-time high, according to data from Reonomy. At the close of 2019, there was $147 billion in cash equity available for commercial property acquisitions, and in the first half of 2020, nearly $24 billion had been raised. However, lender appetite for commercial property debt has dwindled, and the lack of debt financing had impacted commercial property investment.

Read more...Lenders Appetite for Commercial Property Debt Dwindles via GlobeSt

Apartment Tenants Are Transitioning to Short-Term Leases via GlobeSt

Apartment tenants with pending renewals are beginning to opting for short-term or month-to-month leases rather than long-term leases, according to the latest survey from the National Apartment Association, which found that nearly 35% of landlords said that some portion of tenants renewing leases signing short-term lease structures. The previous monthly report—this latest survey was conducted from July 20 through July 24—did not address short-term lease structure, however, the data notes that tenants’ preference for short-term leases has been increasing since March.

Read more...Apartment Tenants Are Transitioning to Short-Term Leases via GlobeSt

Texas unemployment fell to 6.8% in August as state added 106,800 jobs via Dallas Morning News

Texas' unemployment rate fell again in August to 6.8% as the state added 106,800 jobs over the month, according to new data from the Texas Workforce Commission.

The state unemployment rate for August is below the seasonally adjusted national unemployment rate of 8.4%. In July, Texas' unemployment rate was 8%.

Read more...Texas unemployment fell to 6.8% in August as state added 106,800 jobs via Dallas Morning News

Yardi: Multifamily Rents See Second Consecutive Month of Growth via Multifamily Executive Magazine

U.S. average rent growth saw a second consecutive month of continued growth in August, creeping up by an average of $1 to $1,463. However, on a year-over-year basis, rents decreased 0.3% in August, unchanged from July.

However, with millions of Americans unemployed, it’s still unclear what the remainder of the year will hold for the multifamily industry, according to the latest Yardi Matrix National Multifamily Report.

Read more...Yardi: Multifamily Rents See Second Consecutive Month of Growth via Multifamily Executive Magazine

ALN Monthly Market Stats September 2020 via ALN Apartment Data

ALN Data just released their August 2020 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.

Read more...ALN Monthly Market Stats September 2020 via ALN Apartment Data

Apartment Rent Collections Continue to Decline via GlobeSt

Multifamily fundamentals continue to show signs of distress in the wake of the widespread job and economic losses created by the Coronavirus.

The latest report from the National Multifamily Housing Council’s Rent Payment Tracker, which measures the number of apartment households that make a full or partial rent payment, shows a drop of 2.4%—or 279,457 households—year-over-year, as well as a monthly decline. According to the NMHC Tracker, 86.2% of apartment households made a full or partial rent payment by September 13, compared to 86.9% that paid by August 13 of this year.

Read more...Apartment Rent Collections Continue to Decline via GlobeSt

Multifamily Lease Pricing Down As Properties Opt for Shorter-Term Incentives via GlobeSt

Pricing for new apartment leases was down 5% in August from the prior year and lease renewals for under 12 months were on the rise, according to a monthly report on Covid-19’s impact on multifamily housing from MRI Software.

The August drop in new lease pricing continues a trend from July, with properties using shorter-term pricing incentives for leases of less than a year. This shows “good expiration management practices” to protect summer 2021 leases and avoid late-year expirations, said the MRI Software report, which is based on data from its property management software users.

Read more...Multifamily Lease Pricing Down As Properties Opt for Shorter-Term Incentives via GlobeSt

Apartment construction rebounds from pandemic slowdown via Dallas Morning News

Apartment construction activity is bouncing back after declines early in the COVID-19 pandemic.

After big drops in building in April, May and June, nationwide permits for new apartments and multifamily projects saw a surge in July, according to a new report from RealPage.

Read more...Apartment construction rebounds from pandemic slowdown via Dallas Morning News

The flip side of Trump's eviction ban: Landlords face big crunch via Politico

The White House’s move to ban evictions across the country during the coronavirus crisis is having an unintended side effect: It's threatening the livelihood of millions of landlords.

The sweeping order effectively requires landlords to subsidize distressed tenants’ housing through the end of the year or face criminal penalties and hefty fines. That’s a tall order for the country’s 8 million independent landlords — most of whom lease a unit here or there on property they own without the financial backing of professional management companies.

Read more...The flip side of Trump's eviction ban: Landlords face big crunch via Politico

The Pandemic Stifles Rent Growth in Urban Apartments via GlobeSt

Even before COVID-19, apartments in some downtown locations were facing pressure from new supply. Eighty percent of 611,000 units under construction are at the top end of the market, according to CoStar Group.

“I think we’ve been talking about this on the multifamily side for a while,” says CoStar Portfolio Strategy Senior Consultant Juan Arias. “There was going to be a significant supply overhang, specifically in luxury urban multifamily, if a recession came. They were building a lot of apartments. Before the pandemic, we were seeing a sufficient amount of demand coming in, but obviously, all bets are off at this point.”

Read more...The Pandemic Stifles Rent Growth in Urban Apartments via GlobeSt

Over 87% of Dallas-Fort Worth apartment renters made their September payments via Dallas Morning News

With the halt in federal unemployment payments, the share of renters who aren’t making their monthly payments has risen significantly.

As of last week, 76.4% of U.S. apartment renters had made their September payments. That’s almost five percentage points less than a year ago and more missed rent payments than earlier in the pandemic.

Read more...Over 87% of Dallas-Fort Worth apartment renters made their September payments via Dallas Morning News

September Rent Payments Reach 76 Percent: NMHC via Multi-Housing News Online

More than 76 percent of U.S. rental households have made rent payments as of Sept. 6, according to the latest report on rent payments from the National Multifamily Housing Council.

The report comes a month after additional $600 a week unemployment benefits expired and about a week after the Trump administration announced a nationwide eviction moratorium through the end of the year.

Read more...September Rent Payments Reach 76 Percent: NMHC via Multi-Housing News Online

DFW apartment leasing shows signs of a rebound via Dallas Morning News

Demand for apartments in Dallas-Fort Worth and nationwide plunged this year with the pandemic. But there are signs that the apartment market is bouncing back with a flurry of new leasing.

During the last week of July, new apartment lease signings were up 11% from a year earlier, according to a new report from RealPage.

Read more...D-FW apartment leasing shows signs of a rebound via Dallas Morning News

Houston Economic Indicators September 2020 via Dallas Fed

Indicators for Houston employment, unemployment and manufacturing improved in July. Leading and coincident indexes also showed gains. Higher-frequency data on mobility and engagement point to a tepid end-of-summer recovery from a COVID-19-driven midsummer lull. Taken together, the data suggest that Houston continues to make strides toward economic recovery, but the pace has likely slowed.

Read more... Houston Economic Indicators September 2020 via Dallas Fed

Finance Rates For Small Multifamily Real Estate Find Stability via GlobeSt

The cap rates for small multifamily properties barely budged between the first and second quarters of 2020, according to a new report by Chandan Economics and Arbor Realty Trust.

Cap rates narrowed by 5 bps in the second quarter, landing at 5.8%, explained the article, which was published on lender Arbor Realty Trust’s website.

Read more...Finance Rates For Small Multifamily Real Estate Find Stability via GlobeSt

Austin Economic Indicators September 2020 via Dallas Fed

The Austin economy continued to improve in July. The Austin Business-Cycle Index expanded. Recent payrolls posted healthy gains, and while jobs and the unemployment rate improved in June and July, both remain significantly below their March levels. Regional consumer spending since mid-July held at pre-COVID-19 levels. Existing-home sales remained strong, and building permits rebounded.

Read more...Austin Economic Indicators September 2020 via Dallas Fed

New Lease Signings for Apartments Pick Up in July via RealPage

New lease signings continued to increase across most major apartment markets in July. Some of the gains in leasing activity were due to pent-up demand, as stay-at-home orders due to COVID-19 were lifted. But normal seasonal renting patterns were also at play.

From late March through early May, new lease signings across the nation plummeted as COVID-19 forced most leasing offices to shutter amid shelter-in-place orders.

Read more...New Lease Signings for Apartments Pick Up in July via RealPage

Eleventh District Beige Book​ 9/2/20 via Dallas Fed

Increasing COVID-19 infections in the Eleventh District have disrupted the budding economic recovery in some sectors and is the biggest risk to the near-term outlook. While manufacturing activity continued to expand and loan volumes increased in the financial sector, service sector activity declined overall in July but resumed its nascent recovery in August. Retail sales fell steeply in July but stabilized somewhat in August. Energy activity remained depressed. Activity in the housing market was a bright spot, with home sales rising sharply. Employment remained fairly stable, according to contacts. Input costs rose modestly while selling prices were flat to down. Outlooks were increasingly uncertain, with numerous contacts expressing concern over surging COVID-19 cases and the resulting disruption to business.

Read more...Eleventh District Beige Book​ 9/2/20 via Dallas Fed

CDC Declares Eviction Moratorium That Will Last Until Year’s End via GlobeSt

The Centers for Disease Control and Prevention is using its quarantine authority to temporarily halt evictions in order to keep COVID-19 from spreading.

This order will take effect immediately and last until Dec. 31, 2020.

Renters must say they are not able to pay their rent or are likely to become homeless if they are evicted. People earning under $99,000 a year or couples earning less than $198,000 a year are eligible.

Read more...CDC Declares Eviction Moratorium That Will Last Until Year’s End via GlobeSt

Apartment Rent Payments Fall for Third Straight Month via GlobeSt

Apartment rent payments continued their downward drift in August. But the industry’s eyes are focused on September, as states try to fill in the gap from expired unemployment benefits provided by the CARES Act.

The number of households paying rent through August 27 stood at 92.1%, down from 93.3% in July and 94.2% in June, according to the National Multifamily Housing Council’s Rent Payment Tracker. The rate was down 1.9 percentage points year-over-year from August 2019′s 94%.

Read more...Apartment Rent Payments Fall for Third Straight Month via GlobeSt

As Another Month’s Bill Comes Due, Renters at Small Apartment Buildings Struggle via NREI

The vast majority of residents kept paying rent this summer at larger apartment communities–despite the economic crisis caused by the spread of the novel coronavirus. But smaller apartment properties typically do not have professional management companies–they are not included in the data that shows renters are still paying rent. And many renters who live in these building have stopped.

Read more...As Another Month’s Bill Comes Due, Renters at Small Apartment Buildings Struggle via NREI

Free rent deals double with the pandemic via Dallas Morning News

Apartment landlords are ramping up the freebies to attract tenants during the pandemic.

The share of rental units offering concessions to tenants has almost doubled since early this year as COVID-19 has swept the country, according to a new study by Zillow.

More than 30% of nationwide rentals are offering some kind of concessions.

Read more...Free rent deals double with the pandemic via Dallas Morning News

Texas Quarterly Apartment Report 2Q2020 via Real Estate Center

Economic activity contracted sharply in second quarter 2020 due to COVID-19 shelter-in-place restrictions, but then rebounded as the economy re-opened during May and June. Putting the health crisis in a historical context, neither the Great Depression nor the Great Recession nor any other recession over the past two centuries caused such a steep, sudden economic decline. The strength and pace of the recovery are unknown because they depend on health outcomes that allow or impede the complete re-opening of the economy. Barring a second wave of the virus and another economic shutdown, 2Q2020 should represent the worst of the economic slump.

Read more...Texas Quarterly Apartment Report 2Q2020 via Real Estate Center