November, 2012 | Ashworth Partners

Some perspective on New Apartment Building Unit Starts: Census Bureau’s stats charted by the NAHB

The NAHB is out this morning with a chart that gives some perspective on apartment building investment starts. The Census Bureau reported 285,000 unit starts in October for 5+ unit buildings. At that rate it looks like we’re just returning to what was a sustainable level of starts in the ’97-’06 period.

Apartment Building Investment Starts Returning to Sustainable Level — Census Bureau data plotted by the NAHB

While developers tend to overshoot the sustainable level (which is where the apartment building investment cycle comes from) the hope is that Continue reading Some perspective on New Apartment Building Unit Starts: Census Bureau’s stats charted by the NAHB

Risks to Apartment Overbuilding Averted, For Now says ReisReports

In a piece just out today ReisReports says that new apartment starts have been postponed to 2014 by many developers.

The “bubble” now shows up in 2014, but if economic growth ramps up, then additional supply will most likely be absorbed relatively painlessly.

But not all Metros escape. The report mentions Washington DC and suburban Maryland as two of those who will still see large increases in supply next year.

Interestingly they name Seattle as a market that should be able to absorb the new supply coming because Continue reading Risks to Apartment Overbuilding Averted, For Now says ReisReports

The Point of Maximum Pessimism and Apartment Building Investments via Alhambra Investment Partners

Very nice piece from Joseph Y. Calhoun over at Alhambra Investment Partners covering some of the unexpected good things that could happen to our economy entitled Looking For Silver Linings. He includes this nugget with its implication of a good apartment building investment climate continuing:

In the ten years prior to the recession, household formation averaged 1.5 million per year. From 2007 to 2010 that rate was cut by 2/3. Household formation recovered to a bit over 1 million in 2011 and probably rose more this year. Still there is a gap of about 2.5 million households between the number formed in that period and what would be expected based on demographic trends. There is pent up demand for housing (although probably primarily rental housing) that only awaits some job growth to be realized. [Emphasis mine]

Even if Continue reading The Point of Maximum Pessimism and Apartment Building Investments via Alhambra Investment Partners

The Seasonal Effects on Apartment Building Effective Rents, Occupancy and Revenue Growth. Plus much more…

Axiometrics’ monthly apartment building investment report has a great chart showing the seasonal effects on effective rent, occupancy rate and revenue growth. How do you model seasonality in your budgets? What do you think is the best way to do this?

Seasonal Effects on Apartment Building Investment Results — Source: Axiometrics Inc.

Their report this month also has a very Continue reading The Seasonal Effects on Apartment Building Effective Rents, Occupancy and Revenue Growth. Plus much more…

The State of US Commercial Real Estate, Single Family and Apartment Building Investment Markets. By Tom Barrack, Colony Capital

Tom Barrack of Colony Capital on what’s really happening in US real estate from an investor’s perspective. The clearest, most cogent look at the state of commercial, multifamily and single family markets today and where the opportunities are. The first five and a half minutes is about Europe and the bottom line there is don’t but after that it is all gold. If Tom wanted to be one of those real estate ‘gurus’ he could package this video with a big notebook and some advertising and sell it for $10,000- and it would be better than any of the other stuff out there. And you get it for free. I’ve watched three times and get an extra little nugget each time.

The state of real estate in the US, commercial, single family and apartment building investment — Click on the image to view the Bloomberg video.

The big takeaway for me is that (temporarily at least) Continue reading The State of US Commercial Real Estate, Single Family and Apartment Building Investment Markets. By Tom Barrack, Colony Capital

20% of apartment building sales this year were tax assessed for more than their selling price. – Dupre+Scott

Are you reviewing the property tax assessments on your apartment building investments every year? In Seattle apartment research providers Dupre+Scott found that “this year almost 20% of the sales were assessed for more than they sold for. They were over-assessed by an average of 22%”.

In their video narrated by the xtranormal sounding ‘Kate Gardens’ she says: “With apartment prices climbing so much in the past year, we didn’t think many properties would be assessed for more than they sell for”. But their research shows that’s not entirely the case.

“… between 2000 and 2008 the average apartment was assessed for only 70 to 80% of what it sold for. Then things changed. In 2009 and 2010, the average property sold for less than its assessed value. And even though assessed values make more sense today, compared to prices, they are still higher than they used to be”.

OK that’s Seattle you may be thinking but the article gets even better Continue reading 20% of apartment building sales this year were tax assessed for more than their selling price. – Dupre+Scott