Tag: apartment demand

Attention apartment investors: An entire generation has lost its interest in homeownership.

When it comes to apartment building investing one has to consider homeownership as competition for ‘our’ residents. But now in a post that’s part of his series on where the housing market stands today, Barry Ritholtz over at The Big Picture blog has this to say:

“There are many good reasons to believe that the 5.5 million foreclosures we have so far brings us only to the 5th inning of this real estate cycle. We are, in my best guess, barely halfway through the full course of foreclosures. By the time this entire unwind is complete, the United States may end up with a total of 8-10 million foreclosures. Apartment Building Investing and Foreclosures

Therein lay the Psychology factor. Once we begin to see an increase in foreclosures, the data is going to be far less accommodating. Monthly prices start falling, fear levels rise, and a viscous cycle could begin. Consider the recent college grads, who typically form each wave of first time buyers. From their perspectives, this whole housing thing must seem absurd. Their observations about home ownership is not the American Dream, but rather, a nightmare. Yale professor Robert Shiller worries that we have lost an entire generation of potential home buyers.” [Emphasis mine] BTW, Shiller is co-author of the Case-Shiller index, a measure of the state of the housing market. Continue reading Attention apartment investors: An entire generation has lost its interest in homeownership.

National Apartment Building Vacancy Plummets, Defies Fourth-Quarter Seasonal Slowdown says report.

Marcus & Millichap’s latest report on Apartment Building Investment called “The Outlook” is just out today. In it they cover the usual national multifamily trends; rents up, vacancy down, economy slowly recovering, jobs growing but could be better. Then they take it a little deeper with these points (bel0w) then flesh it all out with charts demonstrating that things are really picking up for apartment building investors.

Here’s the exec sum:

  • Expanding Production Capacity Signals Stronger Job Creation.
  • Sustained employment growth underscores traction in the economy.
  • Apartment demand surges, completions sink to new lows, and a sweeping recovery matures into an expansion cycle.
  • Vacancy rates tighten across markets and asset classes, moving the sector into expansion.
  • Foreclosed homes and government-sponsored REO-to-Rental program offer rental alternatives to apartments.
  • Cap rate arbitrage and stabilizing operations create a compelling investment thesis for opportunistic and value-add strategies.
  • Stronger job growth and household formation will provide a steady source of new entrants to the multifamily rental market. Continue reading National Apartment Building Vacancy Plummets, Defies Fourth-Quarter Seasonal Slowdown says report.

Where is Your Multifamily Market In The Cycle? Nice interactive map. Via @UrbanLandInst

Is Apartment Building Investment in the up cycle in your market? Job growth is the most important leading indicator of the market cycle. Check out the cool interactive map through Q4 2011 from The Atlantic here: MetroMonitor Economic Performance Maps

Apartment Building Investment Cycle Map

Seattle Multifamily Vacancy at 4.2% Says Dupre + Scott, average rents over $1,500 too.

For more on the Seattle area apartment building investment climate see the Seattle Times article here: Apartment rents likely to keep rising through 2012

Apartment Building Investment in Seattle

Hat tip: Paul McFadden

Getting Inside the Head of Today’s Online Renter, multifamily report now available.

apartment building investmentFrom my friend Heather over at Behind The Leasing Desk Consulting: “fact: I ♥ Satisfacts! Check out their new report on the mind of the online renter for some great insight into what your potential residents are thinking.”

From Satisfacts: “We asked, and now it’s ready for YOU. Getting Inside the Head of Today’s Online Renter is the most comprehensive analysis ever conducted in the industry on the impact of technology and social media on apartment marketing and operations.” Get the report here

 

When long time contrarians flip is that confirmation of a market top? What about in multifamily?

Read this week that well known stock market perma-bears have gone bullish and that struck a nerve in my contrarian’s contrarian heart. This morning I read a post on the Joseph Bernard Investment Real Estate blog that really got my attention.  Here’s what stopped me in my tracks:

In three decades working in and ­studying multifamily, Johnsey, president of Dallas-based research firm Axiometrics, has developed a bias toward an outlier’s view of what’s happening and what’s coming next. This time, though, it’s different. Strangely, he’s finding no counterpoint position to argue.

“Everything is just ripe for a robust apartment market,” Johnsey says. “I’m always looking for problems. But these numbers are just some of the strongest I’ve seen.”

Johnsey has company aplenty. Market researchers, Wall Street analysts, REIT executives, big multifamily players, and small alike can scarcely quell optimism over practically a sure bet for a bountiful 2012. [Emphasis mine]

Regular readers and students of the financial collapse will instantly recognize the first highlight as echoing the title of probably the best book ever written on the subject, “This Time Is Different: Eight Centuries of Financial Folly”. Authors Rogoff and Reinhart have researched and written (exhaustively) about how many times that sentiment has proven exactly wrong. If you haven’t read it, check it out on Amazon by clicking on the book image in the ‘Learning From History’ section on the right of this page.

Granted the rest of the article goes on to lay out the great fundamentals the national apartment market is currently enjoying and further that short of institutional grade properties in core markets multifamily is a very local business (and properties are more reasonably priced). But still…

What are you seeing in your market?

Canadian Multifamily Bubble? Sadly the US can watch from hindsight.

Interesting peek at multifamily in Toronto and Vancouver, worth a read to see how many rationalizations you recognize (or have uttered yourself).  Nice quote: “If builders stopped building today, there’s five years worth of supply that is about to be delivered, relative to what normal population growth is.” Sound familiar? They’re even starting to do NINJA liar’s loans.

Toronto home and condo prices are amazingly high, the average price for a detached home C$543,993; for condos it’s ‘only’ C$343,835. In Vancouver the Continue reading Canadian Multifamily Bubble? Sadly the US can watch from hindsight.

Latest NMHC Multifamily Survey: Tightening Markets, More Sales, Debt and Equity Financing Becoming More Available.

See the report here: NMHC Quarterly Survey of Apartment Market Conditions