Back in February we posted an Axiometrics chart plotting the revenue growth vs. job growth in leading apartment investment markets in the US. They were out last week with an updated chart but not just in the way we might think since the numbers are Axiometrics’ 2013 forecasts for revenue and job growth updated through May this year. To me the real ‘update’ is that they reversed the axises on the chart and I think it makes more sense laid out this way:
Mark Hickey of CoStar put out a piece looking at who was responsible for the near record $65.8B of apartment building investment in 2012. CoStar’s numbers show that private owners/developers did just about half of all acquisitions last year and institutions were in for 12%, both near their recent trends. REITs on the other hand increased their share by a third, responsible for 12% of sales volume last year.
Interestingly the sellers were pretty much the same groups, except REITs who were the largest net buyers last year.
The Urban Land Institute’s April Real Estate Business Barometer reports that apartment building investment sales were strong enough to pull the entire sector up from last month’s slump while CRE prices are at four year highs. Condominium sales are also at a 5-1/2 year high with strongly increasing prices.
CBRE Econometrics is out with a new report showing population growth trends in major US metros has shifted towards urban centers since 2010 but apartment building investors have been keeping pace (or exceeding it) with new construction. Author Gleb Nechayev, Senior Managing Economist lays it out nicely in a series of charts:
…. “Only six markets advanced their position on the [Dividend Capital Apartment Market] cycle chart.” Once again with the notable exception of Seattle who has left in the basement of the cycle despite overwhelming evidence that it has moved well up in the cycle by his own definition. See my post from last quarter detailing the definitions and why Seattle’s apartment building investment cycle location according to Dr. Mueller is incorrect here. For other cities have a look and let me know if your markets are accurately placed:
In their latest apartment building permitting report Axiometrics says: “permitting increased 44.3% or 84,308 units from the January 2012 figure of 274,640 units.” This is very near the long term average of 280,000 units, see the chart: