U.S. Homeownership at 17-Year Low as Recession Scars Linger
Digested From "U.S. Homeownership at 17-Year Low as Recession Scars Linger"
Reuters (04/30/13) Mutikani, Lucia
According to the Commerce Department, the national homeownership rate for the first quarter was 65.2 percent -- down from 65.3 percent in the last three months of 2012 and from a high of 69.4 percent in 2004. The share of Americans who own their homes now is at the lowest level in 17 years, and economists say it could drop even more considering that more than 10 million borrowers owe more on their mortgages than their properties are worth. "It's probably going to drop another point or two over the next three years because there are still a lot of foreclosures," speculates IHS Global Insight economist Patrick Newport. "More people are going to become renters going forward." The decline in ownership -- most pronounced among Americans between the ages of 45 and 54 -- also suggests that the pickup in home sales has been fueled primarily by speculators who want to rent out the properties. "It's the same story of people choosing to rent versus owning a home," remarked BNP Paribas economist Yelena Shulyatyeva. "So far in the recovery home sales have been supported by investors and what happens if they go away?"
Market Trend Insights
Why Are Vacancy Rates Dropping Alongside Ownership Rates?
Digested From "Vacancy Rates Drop Alongside Homeownership Rates"
Housing Wire (04/30/13) Hopkins, Megan
U.S. vacancy rates suggest more Americans are creeping back into the housing and rental markets, but at a very controlled pace. The Census Bureau notes that rental vacancy rates nationwide slowly dipped to 8.6 percent in the first three months of this year, down 0.2 percentage points from 2012's January-through-March period. For homeowners, the vacancy rate was a much lower 2.1 percent, down 0.1 percentage point from the first quarter of 2012. These figures do not include properties held off the market -- those not for sale or rent -- which Trulia estimates comprise 54.5 percent of all year-round vacant units. As prices continue to appreciate, some of these held-off market vacant units are likely to come onto the market and ease the tight supply buyers are now facing. Looking at the different regions, the rental vacancy was highest in the South (9.9 percent) and the Midwest (9.5 percent). Meanwhile, homeowner vacancy rates were 2.5 percent in the South and 2.1 percent in the Midwest versus 1.9 percent in the Northeast and 1.5 percent in the West.
How Did Colorado Springs' Vacancy Rate Dip to Its Lowest in 12 Years?
Digested From "Colorado Springs Apartments in High Demand"
Colorado Springs Gazette (05/02/13) Laden, Rich
Strong demand for apartments in Colorado Springs has pushed the metro area's multifamily housing vacancy rate to its lowest level in nearly 12 years during the first quarter, according to the Colorado Division of Housing and the Apartment Association of Southern Colorado. Their joint report shows a vacancy rate of 5.6 percent between January and March of this year, down from 6.4 percent during the same period a year earlier. The city's northwest side had a 3.7 percent vacancy rate in the first quarter, which was the lowest in the entire market. Reflecting the rising demand for apartments, monthly rents averaged $787.74 in the quarter -- a year-over-year increase from $754.77, but down from the fourth quarter's record high of $790.95.
Two Reasons for Denver's Mile-High Apartment Rents
Digested From "Denver Apartment Rents at All-Time High, Report Says"
A new study by the Apartment Association of Metro Denver and the Colorado Division of Housing shows that Denver-area apartment rents have hit a record high. During the first three months of this year, the average monthly rent in metro Denver climbed 4.2 percent to $992 from $952 in the first quarter of 2012. Rents are going up because the market's apartment vacancy rate has slipped to 4.6 percent -- the second-lowest rate recorded in any quarter since 2001's January-through-March period. There is a second reason for the rent hikes. While the number of new apartments delivered has increased rapidly since 2010, the numbers have not been big enough to substantially push the metro area's vacancy rate up. Ryan McMaken, an economist with the Colorado Division of Housing, comments, "We do see some submarkets where vacancies are temporarily up as new communities lease up, but that’s not indicative of a decline in demand."
New Apartments Boom! So Why Are Twin Cities' Vacancies So High?
Digested From "New Apartments Barely Putting a Dent in Twin Cities Vacancy Rates, and Rents Are on the Rise"
Minneapolis Star Tribune (MN) (05/01/13) Buchta, Jim
Despite the fact that hundreds of new apartments have been built in Minnesota's Twin Cities, the average vacancy rate in the region has barely budged. According to Marquette Advisors' first-quarter report, the average vacancy rate in Minneapolis and St. Paul was 2.8 percent compared with 2.9 percent during the previous quarter. This marked the eighth straight quarter in which the vacancy rate has remained below 3.0 percent. Furthermore, the vacancy rate was below 3.5 percent in 48 out of 54 Twin Cities submarkets. In turn, the average rent for the January-through-March period was $966 -- an increase from $957 during the fourth quarter and $935 from the first quarter of 2012. Nearly 760 new apartments were brought to market in both downtown Minneapolis and the southwest neighborhoods during the last 15 months. Nevertheless, the vacancy rate in those submarkets was 2.2 percent and 2.1 percent respectively.
L.A. County Apartment Rents Have Gone Hollywood
Digested From "Apartment Rents Keep on Rising in Los Angeles County"
Los Angeles Times (05/01/13) Vincent, Roger
According to a first-quarter report by Marcus & Millichap, apartment vacancies plummeted in Hollywood during the past 12 months and rents rose as the world-famous Southern California neighborhood continued to recover from the recession. Apartment vacancies remained more plentiful in the Santa Clarita Valley, where more people who had been renting made the leap to homeownership with so many low-priced houses on the market. Monthly rents have increased throughout most of Los Angeles County in the last year, with both blue- and white-collar companies increasing payrolls at a faster clip than the U.S. average, notes Marcus & Millichap. Apartment community owners and managers are expected to continue raising rents in the months to come, particularly in neighborhoods where empty rental units are scarce. Since the recession, L.A. County rents have gone up 12 percent to an average of $1,654 a month. The study read: "Rents in the Westside cities and downtown have climbed nearly 20 percent since the most recent trough, and renters that signed bargain leases just a couple of years ago are finding it challenging to meet the new requirements." Marcus & Millichap researchers determined that the the five tightest rental markets were South Los Angeles, the South Bay, Palms/Mar Vista, Brentwood/Westwood/Beverly Hills, and Hollywood.
Deals and Transactions
What Was Behind AvalonBay's Q1 2013 Revenue Bump?
Digested From "AvalonBay Revenue Up on Acquisition"
Washington Business Journal (04/30/13) Clabaugh, Jeff
AvalonBay Communities Inc., which completed an acquisition of 60 apartment communities in February, recorded higher quarterly revenue as a result. However, acquisition costs held back the Virginia-based multifamily REIT's funds from operations. AvalonBay reported first-quarter revenue of $315.4 million -- a 23.9 percent increase from a year earlier. Net income, meanwhile, totaled $75.4 million versus $57.8 million year over year. Unfortunately, first-quarter funds from operations fell from $1.28 per share to 78 cents per share. AvalonBay currently has ownership interests in in 272 apartment communities, with another 27 in various stages of planning and development.
Va. REIT Agrees to Buy 10 Apartment Communities in Three States
Digested From "REIT Embarks on Another Growth Spurt"
Richmond BizSense (05/02/13) Schwartz, Michael
Landmark Apartment Trust of America is under contract to acquire 10 apartment communities for nearly $262 million, according to a recent SEC filing. The properties are suburban apartment communities with 3,422 total units in three states -- North Carolina, Tennessee, and Texas. The Virginia-based multifamily REIT is working on what it hopes will be a string of deals to boost its holdings ahead of a planning public offering. "With the combination of what we have under contract and what we just closed, it's a pretty good growth spurt for us once again," said Jay Olander, Landmark Apartment Trust's founder and chief executive. "We are looking at a number of acquisitions, which are consistent with our goal of bringing the company to a total of $2 billion market capitalization over the next year." Olander said the acquisitions are expected to close within the next 60 days.
Top 10 Money-Saving Apartment Amenities
Digested From "Top 10 Money-Saving Apartment Amenities"
Chicago Tribune (04/26/13)
There are 10 apartment amenities that can save most apartment residents money each month. Number one, having a gym membership included with each month's rent can save fitness-minded residents a lot of money. Some apartment communities have an on-site fitness facility, while others offer complimentary memberships to a nearby gym. Two, an on-site business center can significantly reduce utility costs. This amenity has gained popularity in recent years with the rise in people working from home. In big cities, finding a rental housing situation that includes parking in one's monthly rent can reap signifcant savings. Four, some apartment communities have partnered with local businesses to give residents perks. These can range from discounts and free products at area stores and eateries. Five, apartment communities that offer an on-site community room or party room can also save residents a bundle. Such spaces are ideal for hosting birthday parties, bridal showers, and other events rather than at local restaurants or other facilities that charge. Six, more and more residents are drawn to communities with a car-sharing service, like Zipcar. Seven, apartment residents can save a little money if their communities offer a grilling area. This way, the resident does not have to buy his/her own grill, propane, or charcoal. Eight, a growing number of luxury apartment communities are offering unique amenities, ranging from dog-washing stations to tire filling spaces to bicycle storage and repair rooms. Nine, those communities that offer guest suites that accommodate overnight guests stand out. Finally, those looking for a place to rent can save money by using an apartment locator service that can detail the best money-saving amenities, pricing, and concessions available.
Legal/Legislative Did You Know
HUD Approves Christie Administration's CDBG-Dr Proposal
Digested From "HUD's Approval of the Christie Administration's $1.8 Billion CDBG-Dr Proposal Clears the Way for Federal Assistance"
Paramus Post (NJ) (05/01/13) Fabrikant, Mel
The New Jersey Apartment Association (NJAA) last week issued a formal response to HUD's recent approval of the New Jersey Department of Community Affairs (DCA) Action Plan for the first tranche of federal CDBG funding. Conor Fennessy, Vice President of Government Affairs for the NJAA, commented: "Federal approval of the Governor's CDBG-DR Action Plan will provide a much-needed boost to on-going recovery efforts. Rental homes were 28 percent of the primary residences damaged by the storm; these funds will help professional rental housing providers restore storm damaged apartment communities." He went on to applaud Gov. Chris Christie's leadership in the matter, as well as praised the ongoing efforts of DCA Commissioner Constable to ensure that all available resources are brought to bear to help those impacted.
Five Ways New Wisc. Bill Would Change Owners and Residents' Lives
Digested From "Advocates Warn Fast-Tracked Bill Will Wipe Out Tenant Rights"
Capital Times (WI) (05/02/13) Schneider, Pat
Resident advocates say a GOP-backed bill being fast-tracked through the Wisconsin Legislature will "erode renters' rights" at a time when record low vacancy rates in Madison are already making it difficult for many to find an apartment. Assembly Bill 183 would do five things. It would remove apartment residents' right to know why a rental application was denied, while limiting owners and managers' liability for giving bad references. The bill would also make it easier for apartment owners to dispose of residents' property and speed up the eviction process. Ijn addition, it would limit owners' obligation to disclose uncorrected code violations. Finally, the measure seeks to correct the unanticipated effects of 2011 law that inadvertently gave apartment residents broader rights to collect double damages for violations of tenant-landlord law. Colin Gillis, an organizer for the Wisconsin Alliance for Tenants' Rights, notes, "The bill's sponsors are fast-tracking this legislation because they don't want it subjected to public scrutiny."
Norman Looks to Become the First Name in Fighting Apartment Crime
Digested From "New Crime Free Program Changing Atmosphere of City Apt. Complexes"
Norman Transcript (OK) (04/29/13) Cole-Frowe, Carol
In Norman, Okla., a new crime-fighting initiative sponsored by the city's Police Department is giving apartment owners and mangers a new tool to increase the personal safety of their residents. On its website, Crime Free Norman is described as a "state-of-the-art, crime prevention program designed to reduce crime, drugs and gangs on apartment properties." The three-phase program revolves around a lease addendum that new or renewing residents sign to acknowledge that managers can evict them with 24-hour notice if there are signs of drugs, prostitution, assault, or other criminal behaviors. The program launched in October 2012 on a yearlong trial basis, according to Captain and NPD spokesman Tom Easley. While participation in the program is voluntary, the city reported that the management from 13 apartment communities attended the first phase, including an eight-hour class on how to reduce crime. After management has completed all three phase of the program, they are allowed to display the Crime Free logo and signage throughout their communities. Authorities say the program has already made a big difference in the area.
Nevada Apartment Group Says Domestic Violence Bill Comes Up Short
Digested From "NSAA Opposes AB284, Supports Victims of Domestic Violence"
Nevada Business Magazine (04/13) Mollak, Chelsea
Nevada's AB 284 aims to provide for the early termination of certain rental agreements by victims of domestic violence. But while the intent is good, the Nevada State Apartment Association (NSAA) says the legislation fails to take into consideration the safety of the entire community. NSAA officials say AB 284, as written, does not protect the victim, other residents, or the community at large. Under the proposed measure, a victim of domestic violence seeking to terminate a rental agreement and vacate the premises must provide the apartment owner with a simple written statement from a qualified third party. However, the bill does not require a police report or protective order. The association said that due to these standards, the perpetrator is not held accountable, leaving them to continue to carry out criminal behaviors. NSAA President Lizza Castro remarks, ""We merely seek equal treatment under the law to ensure fairness to and protection of both the victim of domestic violence and landlords, as well as the community at large."
This Just In: Bill Rancic to Moderate Sir Richard Branson Keynote at the 2013 NAA Education Conference & Exposition
NAA is pleased to announce that Bill Rancic, entrepreneur, author, TV personality and winner of the first season of Donald Trump’s “The Apprentice” will be moderating the Opening General Session of the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.
The session, featuring Sir Richard Branson, international business magnate and founder of the Virgin Group, one of the world’s most recognizable brands, will take place Thursday, June 20 from 12:30 p.m. to 2 p.m.
Both Branson and Rancic are recognized the world over for their insights into innovation and gifts of entrepreneurship, and attendees are certain to be inspired as both gentlemen take the stage together. Rancic achieved national recognition after winning the first season of NBC’s entrepreneur-focused reality competition “The Apprentice.” He now speaks to companies and organizations around the world, runs a highly successful real estate development firm in Chicago and produces and stars in several television shows, including Style Network’s “Giuliana and Bill” and NBC’s “Ready for Love.”
Catching this wave doesn’t require a surfboard, but you will need to register. Visit the NAA Education Conference Website and remember to consider group discounts: register five or more attendees and save your organization up to $400!
Please Consider ‘Full Conference Plus’ When Registering for the 2013 NAA Education Conference & Exposition
Until science invents a way for us to be in two places simultaneously, you may find yourself faced with difficult choices while attending the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego, specifically: “Which of these two incredibly interesting sessions that are taking place at the same time do I attend?”
Now, with the Full Conference Plus registration option, you no longer have to worry. Thanks to the NAA Education Institute’s “Rewind” program, for a limited time, an additional $99 investment will secure video of 21 sessions and PowerPoint-synced audio recordings from 20 sessions. Act fast as prices will increase soon.
Register today for Full Conference Plus!
Deadline Extended: 2013 NAA Survey of Income & Expenses in Rental Apartment Communities
Some of the most valuable information your staff needs when preparing for the upcoming budget season is available to you for free from the National Apartment Association.
By your Company’s participation in the 2013 NAA Survey of Income & Expenses in Rental Apartment Communities, you will receive a free copy of detailed market and national economic analysis this fall that will help ensure valuable, accurate financial and benchmarking information for your company. This data helps you to compare your community’s performance against your peers.
There are several methods for your Company to complete the survey including using our designated Excel file to download data directly from your internal data systems or using our secure survey website. You can download a pdf version for reference to the questions and definitions.
If your (ownership or management) Company has multiple properties, please contact Janet Gora of CEL to determine the best response method for your company (Excel or Online). Janet can be reached at 310/207-7328. If you need an Access Code, contact NAA’s Valerie Sterns at 703/797-0624. The deadline to complete the survey is May 17.
Deadline Extended: Participate in Apartment Compensation Survey
The nation’s largest, most widely used, referenced and recognized compensation resource for the real estate industry how includes NAA as its partner. CEL & Associates welcomes NAA in conducting the National Apartment Compensation and Benefits Survey. This is an overall Company/Corporate-level survey, and is completed by the Human Resources department or CFO/COO offices for your firm.
In its 24th year, the national survey encompasses compensation trends, benefits, compensation policy questions, long-term incentive compensation structures, and detailed information/statistical (quartile) breakout of compensation results on a position by position basis stratified by Company Size (employees), Company Type (public and private), Specialization, Region, and Metropolitan Area.
Companies wishing to participate can complete the survey on our secure survey website. In addition to the general company-level questions online, a designated Excel file is available to download individual salary/bonus data from your HRIS or other internal database. The survey results will be available in early August. Companies participating in the survey receive a complimentary copy of the results. For further information, contact CEL’s Janet Gora via email or at 310/207-7328. The deadline to complete the survey is May 17.
Announcing Maintenance Day at the NAA Education Conference
The National Apartment Association will host its first Maintenance Day which will be held on Thursday, June 20 in San Diego. As part of the NAA Education Conference & Expo, Maintenance Day is represents our continuing efforts to focus on those who keep our industry running every day. The program, specifically tailored to apartment industry maintenance professionals, includes the following:
• Advanced maintenance training
• Tabletop exhibits with focused learning
• One-day pass to the largest trade show in the industry
• Free tickets and reserved seating at the 2013 Maintenance Mania National Championship
Registration is $99 and is limited to 100 participants. For more information and to register, visit the NAA website.
NEW DATES! Upcoming IROP Webinar
Registration is open for the IROP webinar series! Remember, if you promote these courses, you will receive a revenue share of $50 for individuals in your area who sign up!
This Webinar series will begin on Tuesday May 21, 2013 and will run every Tuesday through June 11. All Webinars will be held from 2 p.m. to 5 p.m. ET and includes time for Q&A.
Registration fee: $349 for members or $499 for non-members. Module prices are $99 for members or $125 for non-members.
Group pricing is available for 10 students or more, contact NAA's Shana Treger.
Don't wait, register today!
Is Your Company Military Friendly With Job Openings Across the US?
Exhibit at the 2013 NAAEI Military Career Fair in San Diego and fill those open positions with veterans, military spouses and transitioning military members who are looking for a career “back home”.
When: Wednesday, June 19, 2013
Time: 9 a.m. to 3 p.m.
Where: San Diego Convention Center
Register for a booth at the Apartment Careers website.
For more information, contact Vicki Sharp at 512/550-2021.
NAAEI Designation Courses Offered Near You!
Greater Charlotte Apartment Association
Nevada State Apartment Association
Roanoke Valley Apartment Association
San Antonio Apartment Association
June - August, 2013
Chicagoland Apartment Association
July - August, 2013
Central Iowa Apartment Alliance
September - October, 2013
Greater Charlotte Apartment Association
October - November, 2013
Apartment Association of Greater Los Angeles
November - December, 2013
Nevada State Apartment Association
Roanoke Valley Apartment Association
Greater Charlotte Apartment Association
Roanoke Valley Apartment Association
Find more courses in your area on the NAA website.
For more information about any of the classes listed, please contact Kimberly McCrossen at 703/518-6141 ext. 121.
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