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Economic Growth has Buoyed Multifamily Industry—and Vice Versa

b2ap3_thumbnail_iStock_000073945329_Medium.jpgIt is no secret that the multifamily industry has flourished over the past few years. Adjectives such as hot, booming, sizzling and thriving are commonly used to describe the market. But what exactly substantiates a hot market? Is it a decent rise from previous years or something of a more profound climb?  The numbers will astound you. Recent economic research by the National Multifamily Housing Council and National Apartment Association indicates apartment residents contributed a whopping $1.3 trillion to the economy in 2013. That figure includes dollars and jobs created from apartment construction, operation and resident spending. To give some context to the $1.3 trillion figure and the generally prosperous nature of the market, the study points to the recession-constricted 2009 fiscal year. The 97,000 nationwide apartment construction starts in ’09 represented the lowest in 45 years. By 2013, construction starts ballooned to 294,000, which pumped $30 billion into the economy. Of note, 2013 is the latest full calendar year in which the study was done, but the results remain significant considering 2014 and the first two-plus quarters of 2015 have been even more promising than 2013. Clearly, the economic growth as a whole is largely responsible for the apartment boom. The study isn’t to imply that the multifamily industry is burgeoning while other industries flounder or remain still. The point to be reiterated to owner/operators is that this is a prime, peaking time for the industry. Owner/operators would be wise to continue to distinguish themselves on listings and through extensive mar......
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Apartment Markets Retreat in Third Quarter NMHC Survey

All four indexes of the National Multi Housing Council’s (NMHC) October Survey of Apartment Market Conditions dipped below 50 for the first time since July 2009. Market Tightness (46), Sales Volume (46), Equity Financing (39) and Debt Financing (41) all indicated declining conditions from the previous quarter. “After four years of almost continuous improvement across all indicators, apartment markets have taken a small step back,” said Mark Obrinsky, NMHC’s Vice President of Research and Chief Economist. “Conditions cannot continue to improve indefinitely and new development is at least somewhat constrained by available capital—though more on the equity than the debt side. Even so, both the Market Tightness and Sales Volume Index are within hailing distance of the breakeven level and the Debt Financing Index rose despite some rise in interest rates. This bodes well for the apartment industry going forward.” Key findings include: Opinions are mixed regarding the availability of capital for new development. A total of 77 percent of respondents regarded construction debt financing as widely available—34 percent think both equity and debt financing are widely available, while 43 percent think construction loans are widely available but equity capital for new development is constrained. Only 36 percent think equity capital is widely available. [Note: this is excluding those respondents that chose “Don’t Know/Not Applicable”]. Market Tightness Index fell to 46 from 55. Two-thirds of respondents (67 percent) saw no change in market tightness (higher rents and/or occupancy rates) compared with three months ago. One-fifth of respondents (up from 14 percent in July) felt that ma......
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Multifamily Trends | Top 7 Healthiest US Real Estate Markets

Multifamily Trends | Top 7 Healthiest US Real Estate Markets
With what seems like longer than a half a decade filled with falling real estate prices, it finally seems that the national market is poised to show its first signs of recovery. As a matter of fact, the country on a whole has experienced an average of a 4.9% boost in prices in just the last year. According to the Urban Land Institute, the healthiest U.S. Markets in 2013 are Houston, San Francisco, and Rockville, Maryland which just outside the budding Washington D.C. Area. On the opposite end of this list, we still have markets that are not only failing to perform, but are in the end some of the worst markets in the country. Unfortunately, these markets include Detroit, Michigan and three Florida cities; Miami, Fort Lauderdale, and West Palm Beach. With all the changes taking place across the country, we haven’t yet see the return of the pre-bubble to cash flow and most markets seem to be prospering for investors through capital appreciation. Looking at the current state of the real estate market in the United States, we want to take into account not only the average sales prices and rental returns of the real property, but the area vacancy rates and job growth rates as well. Best/Healthiest U.S. Markets 7. Omaha, Nebraska With an unemployment rate that has been able to remain steady at only 3.9%, +2.5% annual job growth, and a vacancy rate that averages between 3%-4%, Omaha has been able to maintain its local economy on a level that has the c......
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Renters Predict 2012 Presidential Election Results

Renters Predict 2012 Presidential Election Results
Could renters be the ones to call this upcoming presidential election? If history repeats itself, they most certainly will. Four years ago, Apartments.com visitors were surveyed on the 2008 presidential election and more than half said they were voting for then-candidate Barack Obama. As the countdown to the 2012 presidential election winds down, we reveal the results of a similar survey where nearly 70% of respondents say they are backing a President Barack Obama re-election over Governor Mitt Romney. When comparing the two surveys, we noticed some interesting trends in how the attitudes among renters about certain aspects of the election and how their political activity fared from 2008 to 2012.  For example, the number of survey respondents who said they are registered to vote fell 10% from 2008 to 2012, and more than 40% described themselves as very politically active back in 2008 in contrast to the 22% who consider themselves that way today. In addition to the serious stuff, we wanted to have some fun with our respondents by asking them about some hypothetical situations involving the candidates, in the context of living in an apartment community. As a result, we discovered that three quarter of renters would prefer to fold President Obama’s laundry over Governor Mitt Romney’s if left in the dryer, and would rather have Obama as their landlord. Only time will tell—less than four weeks—if the apartment hunters who took our survey will predict the 2012 presidential election once again, but in the meantime, we hope you enj......
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Apartment Market Hot Streak Continues

(This information was produced and shared by NMHC.) For the sixth quarter in a row, the apartment industry improved across all indexes in the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. The survey’s indexes measuring Market Tightness (76), Sales Volume (54), Equity Financing (58) and Debt Financing (77) all measured at 50 or higher, indicating growth from the previous quarter. “The apartment sector’s strength continues unabated,” said NMHC Chief Economist Mark Obrinsky. “Even as new construction ramps up, higher demand for apartment residences still outstrips new supply with no letup in sight. Despite the need for new apartments, acquisition and construction finance remains constrained in all but the best properties in the top markets.” Key findings include: Financing is available, but only for top markets. Only 16 percent reported acquisition capital being available in all markets at all times. Even fewer (10 percent) stated that construction capital was available across markets. The majority reported that acquisition financing (65 percent) and construction financing (52 percent) was only available in top-tier markets. Majority report increased market tightness. The Market Tightness Index edged up to 76 from 74. For the first time in a year, more than half (55 percent) of respondents said that markets were tighter. By contrast, only 2 percent reported the markets as loosening and 43 percent reported no change over the past three months. The Sales Volume Index dipped slightly to 54 from 57. Nearly one quarter (24 percent) of respondents reported increased sales volume, compared......
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