Reis reported that the apartment vacancy rate declined in Q4 to 4.1% from 4.2% in Q3. In Q4 2012 (a year ago) the vacancy rate was at 4.6%, and the rate peaked at 8.0% at the end of 2009.
Some data and comments from Reis Senior Economist Ryan Severino:
Vacancy declined by 10 basis points during fourth quarter to 4.1%, in line with last quarter's 10 basis point decline. Over the last year the national vacancy rate has declined by 50 basis points, on par with the year‐over‐year rate from the last few quarters. Demand for apartments remains strong four years after the recovery began, even as construction activity has gradually been increasing.
Read more...Calculated Risk: Reis: Apartment Vacancy Rate declined to 4.1% in Q4 2013, Expected to increase slightly in 2014
Tuesday, January 7, 2014
DFW apartment development, demand on a hot streak via Dallas Business Journal
Dallas-Fort Worth apartment development and demand are on a hot streak, outperforming expectations by analysts.
In the fourth quarter, North Texas developers built 3,074 new apartments, and although demand for apartments typically chills with the weather, the demand roughly kept pace with 2,739 apartments absorbed in the quarter, according to research by Carrollton-based MPF Research, a division of RealPage Inc.
"The Dallas-Fort Worth apartment sector continues to outperform expectations," said Jay Parsons, MPF Research's national market analysis manager, in a written statement. "It's certainly reflective of the strength of the local economy that apartment demand remains so robust at the same time single-family home sales are back to 2007 volumes."
Read more...DFW apartment development, demand on a hot streak - Dallas Business Journal
In the fourth quarter, North Texas developers built 3,074 new apartments, and although demand for apartments typically chills with the weather, the demand roughly kept pace with 2,739 apartments absorbed in the quarter, according to research by Carrollton-based MPF Research, a division of RealPage Inc.
"The Dallas-Fort Worth apartment sector continues to outperform expectations," said Jay Parsons, MPF Research's national market analysis manager, in a written statement. "It's certainly reflective of the strength of the local economy that apartment demand remains so robust at the same time single-family home sales are back to 2007 volumes."
Read more...DFW apartment development, demand on a hot streak - Dallas Business Journal
Monday, January 6, 2014
What to Watch for in 2014 in the U.S. Apartment Market [Video] via Property Management Insider
With a 4.1% annual growth rate in GDP for Q3 2013, the past few monthly job creation reports exceeding expectations, and Moody Analytics speculating that preconditions are in place for much stronger economic growth in 2014, the economic outlook for the country as a whole in 2014 is encouraging.
All this is good news for an apartment sector that is expecting a significant amount of new product to hit the market 2014: scheduled deliveries in the nation’s 100 biggest metros climbed to 234,700 units in 2014.
Watch video...What to Watch for in 2014 in the U.S. Apartment Market [Video] | Property Management Insider
All this is good news for an apartment sector that is expecting a significant amount of new product to hit the market 2014: scheduled deliveries in the nation’s 100 biggest metros climbed to 234,700 units in 2014.
Watch video...What to Watch for in 2014 in the U.S. Apartment Market [Video] | Property Management Insider
Five Predictions for 2014 via National Real Estate Investor
Prediction No. 1: Economic growth will accelerate
Though growth has been anemic for the last four years, it is poised to increase, albeit at a rate still below the long-term trend of 3.1 percent. But looking at the Q3 growth rate of 4.1 percent provides insights into the multiple divers of growth in this country.
U.S. consumers are better-positioned to increase spending. Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets. With further help from low interest rates, household debt-service burdens are at their lowest level in more than 30 years, according to Federal Reserve data. Household wealth relative to disposable income has surpassed its historical average, according to the Fed, thanks to a pronounced recovery in financial and housing markets. This has given consumers the confidence to spend more of their disposable income, which is growing in line with job creation.
Positive growth sector drivers include the following:
Read more...Five Predictions for 2014 | Institutional Investors content from National Real Estate Investor
Though growth has been anemic for the last four years, it is poised to increase, albeit at a rate still below the long-term trend of 3.1 percent. But looking at the Q3 growth rate of 4.1 percent provides insights into the multiple divers of growth in this country.
U.S. consumers are better-positioned to increase spending. Having paid down (or defaulted on) nearly $1 trillion of household debt, U.S. consumers have aggressively improved their balance sheets. With further help from low interest rates, household debt-service burdens are at their lowest level in more than 30 years, according to Federal Reserve data. Household wealth relative to disposable income has surpassed its historical average, according to the Fed, thanks to a pronounced recovery in financial and housing markets. This has given consumers the confidence to spend more of their disposable income, which is growing in line with job creation.
Positive growth sector drivers include the following:
Read more...Five Predictions for 2014 | Institutional Investors content from National Real Estate Investor
Chasing Yield: Secondary, Tertiary Markets to Shine in 2014 via Multifamily Executive Magazine
Denny St. Romain believes the equity space will be fluid this year as some investors fall back while new ones step in.
“I think the opportunistic joint venture equity—they put so much money out in the last two or three years in multifamily development that they’re harvesting and want to see how that goes before they put anymore out,” he says. “But, as for most things in real estate, as some people get out, new people will be in.”
St. Romain, managing director for capital markets at Chicago-based Jones Lang-Lasalle, sees a shift occurring as opportunities cool off in primary markets, and secondary markets become the shining stars of 2014.
Read more...Chasing Yield: Secondary, Tertiary Markets to Shine in 2014 - Multifamily Executive Magazine
“I think the opportunistic joint venture equity—they put so much money out in the last two or three years in multifamily development that they’re harvesting and want to see how that goes before they put anymore out,” he says. “But, as for most things in real estate, as some people get out, new people will be in.”
St. Romain, managing director for capital markets at Chicago-based Jones Lang-Lasalle, sees a shift occurring as opportunities cool off in primary markets, and secondary markets become the shining stars of 2014.
Read more...Chasing Yield: Secondary, Tertiary Markets to Shine in 2014 - Multifamily Executive Magazine
CRE Will Stay On Road to Recovery in 2014 via GlobeSt.com
The US real estate recovery is set to continue along the path of recovery this year, with investors increasingly looking beyond some of the traditionally popular markets to secondary markets in search of higher yields, according to Emerging Trends in Real Estate 2014, co-published by PwC and the Urban Land Institute.
The predicted growth in secondary markets will stem from investors searching for returns as opportunities in core markets become harder to find and the best assets become more expensive, according to the report’s findings, which stem from an industry survey. As a result, it’s anticipated that 2014 may be the year that many investors who have traditionally focused mainly on large established markets such as Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, DC will expand their focus to other cities in order to protect capital. This trend, first noted in last year’s Emerging Trends report, is likely to build substantial momentum this year given the steady pace of improvement in market fundamentals in secondary markets and with more investments in those markets meeting investors’ risk/return metrics.
Read more...CRE Will Stay On Road to Recovery in 2014 - Daily News Article - GlobeSt.com
The predicted growth in secondary markets will stem from investors searching for returns as opportunities in core markets become harder to find and the best assets become more expensive, according to the report’s findings, which stem from an industry survey. As a result, it’s anticipated that 2014 may be the year that many investors who have traditionally focused mainly on large established markets such as Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, DC will expand their focus to other cities in order to protect capital. This trend, first noted in last year’s Emerging Trends report, is likely to build substantial momentum this year given the steady pace of improvement in market fundamentals in secondary markets and with more investments in those markets meeting investors’ risk/return metrics.
Read more...CRE Will Stay On Road to Recovery in 2014 - Daily News Article - GlobeSt.com
Friday, January 3, 2014
Texas Economic Indicators January 2014 via Dallas Fed
The Texas economy continues to expand, with employment growing at a 2.3 percent annual rate in November. Texas housing starts spiked in November, while existing-home sales and single-family construction permits declined. Texas exports rose in October. Manufacturing activity increased for the eighth month in a row in December, according to the Texas Manufacturing Outlook Survey.
Texas gained 21,700 jobs in November after adding 26,400 jobs in October. Current Texas employment stands at 11.29 million, according to the payroll survey (CES).
The Texas unemployment rate declined to 6.1 percent in November from 6.2 percent in October. The Texas rate remains lower than the U.S. rate, which was 7.0 percent in November.
Read more...Texas Economic Indicators January 2014 via Dallas Federal Reserve
Texas gained 21,700 jobs in November after adding 26,400 jobs in October. Current Texas employment stands at 11.29 million, according to the payroll survey (CES).
The Texas unemployment rate declined to 6.1 percent in November from 6.2 percent in October. The Texas rate remains lower than the U.S. rate, which was 7.0 percent in November.
Read more...Texas Economic Indicators January 2014 via Dallas Federal Reserve
Thursday, January 2, 2014
U.S. Apartment Market Ends 2013 with Tight Occupancy and Moderate Rent Growth via Property Management Insider
Going into 2013’s 4th quarter, the U.S. apartment sector entered a period of vulnerability – with lots of new supply scheduled to complete during what are traditionally the slowest months for apartment demand. So how did the apartment sector hold up?
The good news is that the U.S. apartment sector’s performance remained healthy at the end of 2013, with MPF Research reporting tight occupancy and moderate rent growth at the end of 2013.
In this exclusive video report, Greg Willett and Jay Parsons from MPF Research highlight the nation’s latest apartment occupancy and rent growth statistics as well as other key performance indicators.
Read more...U.S. Apartment Market Ends 2013 with Tight Occupancy and Moderate Rent Growth | Property Management Insider
The good news is that the U.S. apartment sector’s performance remained healthy at the end of 2013, with MPF Research reporting tight occupancy and moderate rent growth at the end of 2013.
In this exclusive video report, Greg Willett and Jay Parsons from MPF Research highlight the nation’s latest apartment occupancy and rent growth statistics as well as other key performance indicators.
Read more...U.S. Apartment Market Ends 2013 with Tight Occupancy and Moderate Rent Growth | Property Management Insider
Cap Rate Outlook: Inflation vs. Investor Demand via Multifamily Executive Magazine
Cap rates often rise when interest rates rise, but that may not be the case in many markets in 2014.
In the short-term, continued strong demand from equity investors should keep in check any potential hikes to cap rates that buyers hope will accompany higher debt costs.
Most finance experts are skeptical that moderately rising long-term mortgage rates over the coming year would have much if any impact on the apartment sector’s equity yields and capitalization rates—particularly among Class A product where interest is so strong. However some expect that higher debt rates would put upward pressure on capitalization rates of smaller and lesser-positioned properties that attract more high-leverage buyers.
Read more...Cap Rate Outlook: Inflation vs. Investor Demand - Multifamily Executive Magazine
In the short-term, continued strong demand from equity investors should keep in check any potential hikes to cap rates that buyers hope will accompany higher debt costs.
Most finance experts are skeptical that moderately rising long-term mortgage rates over the coming year would have much if any impact on the apartment sector’s equity yields and capitalization rates—particularly among Class A product where interest is so strong. However some expect that higher debt rates would put upward pressure on capitalization rates of smaller and lesser-positioned properties that attract more high-leverage buyers.
Read more...Cap Rate Outlook: Inflation vs. Investor Demand - Multifamily Executive Magazine
NMHC: Older Renters to Drive Demand in Next Decade via Multi-Housing News Online
Younger renters have long been the prized demographic for apartment owners, but there’s some indication that an older demographic is going to be an increasingly important segment for landlords in the coming decade, according to a research note published recently by the National Multi Housing Council. That is, the aging baby boom demographic might make itself felt in the rental market as its members downsize from home ownership.
The baby boom generation remains the demographic bulge that it’s been since U.S. birth rates, which dropped precipitously during the Depression in the 1930s, spiked during the prosperity of the 1950s. After another trough in the 1970s, the number of U.S. births has roughly stabilized at around 4 million a year.
Read more...NMHC: Older Renters to Drive Demand in Next Decade | Multi-Housing News Online
The baby boom generation remains the demographic bulge that it’s been since U.S. birth rates, which dropped precipitously during the Depression in the 1930s, spiked during the prosperity of the 1950s. After another trough in the 1970s, the number of U.S. births has roughly stabilized at around 4 million a year.
Read more...NMHC: Older Renters to Drive Demand in Next Decade | Multi-Housing News Online
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