Market Trend Insights
Two Major Reasons for the Decline in Younger Homeowners
Digested From "In the Wake of the Housing Bust, Fewer Young Homeowners"
U.S. News & World Report (01/22/13) by Robert Dietz
The fallout from the housing crisis is still being felt today. One major casualty is the rate of homeownership in the country has fallen substantially. The picture is especially bleak for younger households who comprise the bulk of first-time home buyers. According to U.S. Census Bureau data, the biggest declines in homeownership were among households headed by those under 35 years of age. Rates for this demographic plummeted from a peak 43.6 percent in the summer of 2004 to 36.3 percent at the end of September 2012. There are two major reasons for the decline in homeownership among younger people. First, tight lending requirements and weak labor markets made homeownership unattainable for many in the younger age brackets. Second, foreclosures caused some of these homeowners to become renters or cease to be households entirely and move in with friends or family. Also of concern is the fact that declining homeownership rates for younger households have broad ripple effects, including delays in marriage and having children.
Market Trend Insights
What's Behind the Rising Rents in Central Arkansas?
Digested From "Rising Rates Worry Potential Apartment Renters"
Arkansas Matters (01/25/13) by Josh Berry
Apartment residents in central Arkansas will almost certainly see their monthly rents rise this year -- in some communities, as much as pay 40 cents more per square foot. The higher rates could force some potential apartment residents to question whether they want to live in central Arkansas at all or seek more affordable digs elsewhere. "Basically, it's because of supply and demand," said apartment broker Jerry Webster. He reasoned that the higher numbers of people looking to rent is pushing up monthly rates. Among the most prime areas are Chenal Valley, West Little Rock, and the Heights.
Seattle Apartment Market Awakens While South Sound Snoozes
Digested From "Seattle Apartment Market Booms While the South Sound Snoozes"
Puget Sound Business Journal (Seattle) (01/23/13) by Jeanne Lang Jones
Rents and new apartment construction are both on the rise in Seattle, in sharp contrast to the multifamily housing sector about 30 miles away. Apartment Insights President Tom Caine reports that apartment rents stayed flat in the South Puget Sound area during the fourth quarter with only a slight tightening in vacancies. His firm tracks trends in apartment communities with 50 or more units in the Puget Sound area. The average rent for the three counties that make up this region was $852 in the fourth quarter -- unchanged since 2011's second quarter. Among the three counties, Kitsap County posted the highest average rent at $904 per month. The average rent in Pierce County was $841 per month, while Thurston County saw an average rent of $839 per month. With little change in the vacancy rate, apartment owners and managers are wooing residents by offering incentives that range from an average of $24 a month in Pierce to $38 a month in Kitsap to $41 a month in Thurston. In downtown Seattle, rising rents have fueled a boom in new apartment development. By contrast, the relatively tepid apartment market in the South Sound has sparked little new construction in this sector. According to Caine's research, there are only 553 new apartments under construction and 368 units planned in Kitsap, Pierce, and Thurston counties. Meanwhile, in downtown Seattle last year there were more than 7,300 rental apartments under construction in 46 projects.
The Top 4 New Apartment Communities Near Texas State Univ.
Digested From "Apartment Complexes Spring up Around City"
University Star (01/24/13) by Michael Pope
As more new students continue to enter Texas State University, new multifamily housing being built locally to accommodate demand. A total of four such projects have been approved for student living and will open in May and August. The Avenue consists of one- to five-bedroom flats and townhouses containing 752 beds. The Cottages at Hillside Ranch is made up of one- to five-bedroom apartments, cottages, and townhouses with approximately 400 beds. The Vistas consists of one- to five-bedroom apartments with 597 beds. Finally, Wildwood will feature an undisclosed number of one- to four-bedroom rental apartments and townhomes. However, some individuals have raised environmental concerns about the construction runoff near The Cottages at Hillside Ranch. Others have pointed out that an increase in students riding the trams to apartment communities could affect the Texas State bus routes.
Apartments Have the Power in Madison, Local Utility Reports
Digested From "Madison-Area Rental Vacancy Rate at Nearly 7-Year Low, as Residents Flock to Apartments"
Wisconsin State Journal (01/16/13) by Karen Rivedal
In Wisconsin, the Madison area's apartment vacancy rate finished last year at its second lowest level of the past seven years -- a reflection of continued strength in rental housing demand. Conversely, the data suggests many potential home buyers, especially first-timers, may be avoiding the housing market either by choice or necessity. The information comes from Madison Gas & Electric's (MGE's) latest survey of apartment communities that appear to be vacant because of utility shutoffs or service moved to an owner's name. The poll showed an apartment vacancy rate of 2.07 percent for the last three months of 2012, down from 2.16 percent year over year and from 2.44 percent in the third quarter of 2012. In fact, researchers note that the rate for the last quarter of 2012 was lower than every other quarter of the past 28 except for the first quarter of 2012 when it dipped to 2 percent. MGE figures show that the high point of the past seven years was the third quarter of 2006 when Madison-area apartments showed a 6.28 percent vacancy rate.
Two Big Factors Are Holding Back Apartment Construction
Digested From "NAHB: Multifamily Industry to Lead Market in 2013"
National Mortgage Professional (01/23/13)
Panelists at last week's National Association of Home Builders (NAHB) International Builders' Show in Las Vegas stated that the nation's multifamily housing sector has led the way in the recovery of the overall residential real estate market and will continue to do so over at least the next several years. In fact, the multifamily sector now stands at nearly 70 percent of the way back to a sustainable level. Developers, though, see two major difficulties that could hold back a full recovery. For one, a lack of capital is keeping developers in many U.S. markets from being able to build apartment communities for residents of all income levels. And, two, the sector is faced with increases in the cost of building materials and construction labor, which makes it infeasible to build in certain circumstances.
Is the For-Sale Market Behind Rents Topping Out in San Jose?
Digested From "Apartment Rents Top Out in San Jose, But Region Still Plenty Pricey"
Silicon Valley/San Jose Business Journal (01/22/13) by Nathan Donato-Weinstein
The runaway rental growth in the San Jose, Calif., area has pushed monthly apartment rates into the stratosphere. But that could be tapering off as current apartment residents start to look at their ownership options. The average monthly price of an apartment in the San Jose area was $1,954 in the fourth quarter, according to RealFacts. That is down 1.4 percent from the prior quarter. Occupancy also notched a small decline, falling 0.2 percent over the previous quarter. According to RealFacts data, occupancy is still high at 95.5 percent. Experts say a more robust for-sale market has paused local rental growth.
Rental Home Investors Seek New Markets: Who's Hot, Who's Cold?
Digested From "As Prices Rise, Rental Home Investors Seek New Markets"
USA Today (01/22/13) P. 1B; by Julie Schmit
Rapid appreciation is prompting more big residential real estate investors to shift their focus -- and money -- to new markets in the mad dash to buy more distressed homes to convert into rentals. Phoenix appears to be one of the first markets to experience a decline in investors' interest. Citywide, the share of homes purchased by investors dipped to 28 percent in November from nearly 36 percent just three months earlier, reports Mike Orr, real estate expert at the W.P. Carey School of Business at Arizona State University. Burns Real Estate Consulting CEO John Burns adds that investor interest also may be close to "peaking" in some California markets. At the same time, major investors are picking up purchases elsewhere -- particularly in such Southeastern cities as Atlanta and Tampa. Home shoppers in those two markets are now seeing multiple offers and even bidding wars.
Apartment Developers Vs. Residents in El Paso Showdown
Digested From "El Paso Apartment Market Softens"
El Paso Inc. (TX) (01/20/13) by Robert Gray
While El Paso's apartment market soared previously, there are no indications that it has returned to normal and may be shifting against apartment developers in favor of residents. Occupancy rates fell last year, pushing some developers to slow construction of new rental units. Additionally, at least one bank plans to reduce lending for apartment construction this year. According to Rick Soto, executive director of the El Paso Apartment Association, occupancy rates throughout the city fell between 5 percent and 10 percent. The market has softened largely because a massive expansion of the soldier population at nearby Fort Bliss reached its peak, according to Soto. Another reason, he says, is the increase in apartment construction over the past few years in the city and by the Army on Fort Bliss.
Louisville Apartment Sector Rides Big Time Buying Spree
Digested From "Rising Rents Make Apartment Ownership Appealing"
Louisville Business First (01/25/13) by Kevin Eigelbach
Louisville has seen an unprecedented buying spree over the last year and a half, as approximately $350 million worth of apartment communities have changed hands. No matter their age, apartments are proving to be a hot commodity among buyers. Communities built within the last decade or so have fetched more than $100,000 per unit -- an unprecedented average, marvels Commercial Kentucky Inc. senior real estate adviser Craig Collins. Even apartment communities built during the 1970s that would have sold for $45,000 to $50,000 per door two years earlier have garnered between $60,000 and $65,000, noted Collins, whose Louisville-based firm brokered several of those transactions.
Who's the New Big Man on Campus Housing?
Digested From "Plots & Ploys: Big Man on Campus"
Wall Street Journal (01/23/13) by Maura Webber Sadovi
Barry Reichmann's family built Canada's Olympia & York Developments Ltd. into a real-estate juggernaught that dotted the globe with office buildings before its collapse in the early 1990s. Today, Reichmann is setting his sights on student housing. The 46-year-old has teamed up with a group of partners to invest in student housing through Campus Evolution Villages, a company formed by New York-based investment firm Lauderhill Partners. In December, Campus Evolution Villages acquired a $45 million portfolio of student-housing properties in four states --Kentucky, Louisiana, Missouri, and South Carolina -- that together contain more than 1,760 beds. The deal ranks as the venture's largest purchase to date. Campus Evolution now has total holdings of 2,686 beds. Moving forward, Reichmann said he will remain focused on "growing a U.S. platform" spurred on by the sector's positive demographics.
Transwestern Sells Three Apt. Communities in Maryland
Digested From "Transwestern Team Sells Three Maryland Apartment Communities for Almost $100M"
Commercial Property Executive (01/12/13) by Andrew Maties
Transwestern confirms that its Mid-Atlantic Multifamily Group recently closed three apartment deals in Maryland totaling nearly $100 million. Transwestern represented the sellers in all three transactions, two of which are located in the Washington, D.C., suburbs of Wheaton and Rockville, Md. The third is outside of Baltimore in Owings Mills. Glenmont Crossing is a 199-unit garden apartment and townhouse community in Wheaton that was sold by a partnership of Buvermo Investments and Abbey Road Development. The buyer was the Housing Opportunities Commission of Montgomery County via the right of first refusal process for $27.9 million. Meanwhile, Rockville's Fireside Park is a 236-unit garden-style apartment community that was sold by Hampshire Properties for $36 million. Rockville Housing Enterprises was the buyer. Finally, Home Properties sold the 284-unit Timbercroft Townhomes community in Baltimore County to a joint venture of The Wishcamper Cos. and RMDG Inc. The total purchase price was $29.2 million. Mid-Atlantic Multifamily Group co-director Dean Sigmon remarks, "We are looking forward to the coming year and expect a continuation of the robust apartment market in the Washington metro area, with a continued interest in core and core-plus communities."
Alabama Bill Aims To Prevent Group Living By Sex Offenders
Digested From "Bill Aims To Prevent Group Living By Convicted Sex Offenders"
WHNT (01/27/13) by Nick Banaszak
In Alabama, state legislators have come together to target so-called sex offender "clusters" that are often near children. If passed, their House Bill 85 would prohibit convicted sex offenders from living at the same residence. In fact, it would require that all sex offenders live at least 500 feet away from each other. State Rep. Mike Ball (R-Madison), who helped craft the legislation, said several Alabama neighborhoods have been hampered by groups of sex offenders living together in closely condensed places like apartment communities and motels. Ball said, "When folks feel their children are endangered, we need to do something. If someone has a drinking problem or a drug problem, you need to stay away from people with that same problem, because it's just not conducive to managing to curb your instincts. . . . If children live nearby and there’s just a large number of them [sex offenders], it just creates a huge problem for that particular community."
2013 NAA Student Housing Conference & Exposition Hotel Cut-Off for Reduced Rates is This Friday, Feb. 1
It’s just like the dorms—live and learn from the same home away from home! Register today for the 2013 NAA Student Housing Conference & Exposition in Las Vegas, Feb. 25-27, and don’t forget to book your hotel—and, with NAA’s reduced room rate expiring on Friday, Feb. 1, you’ll want to make sure you’ll be staying near all the education and entertainment—at the ARIA Resort.
Need an example of the great training lined up during the week? How about Michael Wood, Senior Vice President at TRU, one of the world’s leading research firms specializing in teens and 20-somethings, who will headline the keynote session “Youth Truths: The Millennial State of Mind.”
Wood says understanding teens’ attitudes and expectations is critical when preparing to meet their housing needs in college (and beyond). Want to know why? Read “Millennial State of Mind” in the January issue of units.
Wood's presentation is just one of many learning opportunities during two days full of education and networking, from general and breakout sessions to receptions and time spent interacting with exhibitors on the trade show floor.
And, while you’re booking your hotel, don’t forget to bring a group and save! NAA is offering discounts for groups of five or more attendees. Visit the NAA Student Housing Conference website for further details.
One Hundred Reasons to Register By Monday for the 2013 NAA Education Conference & Exposition
OK, you got us—it’s one reason 100 times, but that doesn’t change the fact that you can save $100 if you register by February 4 for the largest and most exciting multifamily housing event of the year: the 2013 NAA Education Conference & Exposition, June 19-22 in San Diego.
It’s “all about the Benjamins,” as they say, and in this case, that $100 bill also features one of the greatest innovators in American history, who said, “an investment in knowledge pays the best interest.”
In the spirit of Benjamin Franklin’s message, it’s time for you to make an investment in knowledge and innovation: Nowhere else will you find world-renowned and innovative speakers, such as Sir Richard Branson, Erik Wahl and Bert Jacobs, to name just a few (visit the conference website to preview these and other speakers), as well as unparalleled education opportunities with more than 50 breakout sessions covering all the industry’s hottest trends and topics. Add in dozens of chances to network and hundreds of supplier partners demonstrating the latest and greatest in products, technologies and services and the decision to attend quickly becomes a no-brainer.
Make sure to book your housing as soon as you register—rooms are going fast. Visit the Education Conference website for information and reservations for all official NAA Education Conference hotels.
And, remember to consider group discounts: Register five or more attendees and save your company up to $500! More information is available.
Learn What Works When Companies Practice Sustainability at the 2013 NAA Green Conference
Conventional knowledge says “it’s not easy being green;” that may be so, but the question multifamily housing professionals should be asking is, “Is it profitable?”
Find out the answer by registering for the 2013 NAA Green Conference, April 15-17, in Baltimore.
Join forward-thinking industry colleagues and learn ways to improve your community’s energy efficiency and bottom-line performance through a cutting-edge lineup of education topics and panel presentations at the NAA Green Conference.
Come learn from acclaimed green-industry expert Andrew Winston, a best-selling author of “Green to Gold” and “Green Recovery,” who will serve as the event’s keynote speaker. Find out how your business can profit from environmental thinking as Winston guides you about what works—and what doesn’t—when companies go green.
You also will have the opportunity to share valuable experiences about “sustainability” successes at your property and discover additional, proven, cost-effective strategies by networking with other industry professionals and suppliers. Featured are sponsored hospitality lounges where attendees and supplier partners can discuss the exciting growth potential of sustainable apartment management.
Save $200 off the onsite registration rate before Feb. 15 by registering at http://bit.ly/TSsgPZ.
Visit the 2013 Green Conference website for all hotel and travel information.
NAA Capitol Conference Features Comeback America CEO
David M. Walker, founder and CEO of the Comeback America Initiative, will be a keynote speaker at the 2013 NAA Capitol Conference in Washington, D.C. Walker will share how the fiscal crisis can be fixed to ensure that the United States enjoys a sustainable economy at the Government Affairs Roundtable Luncheon on Tuesday, March 12. Walker is a former U.S. comptroller general and subject of the critically acclaimed documentary, “I.O.U.S.A.” Register now.
Got Video? Enter Get Reel Video Challenge for Free Trip to the 2013 Education Conference!
What advice do you have for college students considering a career in our industry? Share that advice with NAAEI by entering its “Get Reel” Career Video Challenge by Jan. 31. Videos can be as short as 30 seconds, and the winner receives a trip to the 2013 NAA Education Conference and Exposition in San Diego.
Best of the Best? Enter 2013 NAA PARAGON Awards Competition
The Call for Entries for the 2013 PARAGON Awards is now open! If you would like to nominate an individual, an affiliated association or a community that represents our industry's models of excellence, please visit the PARAGON Awards Overview page. Entries must be received by Monday, March 18, 2013. Winners will receive their PARAGON award during the NAA Awards Celebration breakfast with Bert Jacobs during the 2013 NAA Education Conference & Exposition, Saturday, June 22, in San Diego. They will also be featured in the September 2013 issue of units Magazine, NAA’s monthly publication that reports on the apartment industry.
NAAEI Designation Courses Offered Near You!
Roanoke Valley Apartment Association
South Dakota Multi-Housing Association
Greater Charlotte Apartment Association
Austin Apartment Association
January – February, 2013
Apartment and Office Building Association of Metropolitan Washington
February – March, 2013
South Dakota Multi-Housing Association
February – March, 2013
Rental Housing Association of Boston
April – May, 2013
Roanoke Valley Apartment Association
Apartment and Office Building Association of Metropolitan Washington
To find more courses in your area, click here.
For more information about any of the classes listed, please contact Kimberly McCrossen at firstname.lastname@example.org or 703/518-6141 ext. 121.
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