WEEKLY
Mortgage Rate (30-Year Fixed): 7.08% (as of 10/27)
MONTHLY
Existing Home Sales: -1.5% (September 2022)
New Residential Sales: +17.6% (September 2022)
Median Sales Price for New Houses Sold: $470,600 (September 2022)
Construction Spending: 8.5% YoY (August 2022)
New Residential Housing Starts: 1.44 million (September 2022)
New Residential Housing Completion: 1.43 million (September 2022)
QUARTERLY
Homeownership Rate: +65.8% (2Q22)
Rental Vacancy Rate: +5.6% (2Q22)
Sources: NAR, BLS, Federal Reserve Bank, MBA
Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.
Multifamily fundamentals remain strong. This was reiterated during the Globe St. Multifamily National Conference in Los Angeles last week. The event gathered multifamily investors and dealmakers who all agreed that a market balance is coming with regard to rent and demand. Kitty Wallace, senior executive VP at Colliers, stated that people are coming back to California after the state became a bottom market. Today, they are working with about 15% to 20% of buyers more than before.
9. Multifamily market activity stay strong
Despite the impact of rising interest rates, PSMJ Resources’ Quarterly Market Forecast (QMF) survey of architecture, engineering and construction (A/E/C) firm leaders revealed that the multifamily market proposals remain hot. Unlike single family homes and condominiums that registered negative values in terms of proposal activity in the net plus/minus index (NPMI), multifamily (NPMI of 44.8) and senior/assisted living (17.0) remained positive in 3Q22.
8. Top multifamily owners in 2022 revealed
Multi-housing News (MHN) published this year’s Top Multifamily Owners awardees. The annual survey represents a total of 1.3 million units, estimated at $385 billion in value. Leading the pack is Greystar with 157,613, worth $39.7 million in portfolio and an occupancy rate of 85.1%. The company owns luxury apartments, student housing, senior housing and single-family rentals. Others that made the top 5 include Equity Residential, GID, Nuveen and CBRE Investment Management.
7. NAR: Multifamily construction is on the rise
The National Association of REALTORS (NAR) announced there are now more multifamily properties with 5+ units than there are single family homes. Data from NAR revealed that there are currently 893,000 units in the pipeline versus single-family homes that total 800,000. It also added that multifamily construction is on an uptick at the local level.
6. Student housing occupancy rate increases
According to Yardi Matrix’s Quarterly National Student Housing Report, the fall 2022 student housing rate registered 96.6% occupancy of bedrooms, with 4.1% rent growth. YoY growth in pre-leasing levels was highest in Washington State University (18.9%) and the University of Houston (16.4%). The report also states that the rise in multifamily rent will continue to impact student housing in university areas with a prominent shadow market.
5. JLL: Commercial real estate will capitalize opportunities
Jones Lang Lasalle’s (JLL) research published this week states that the commercial real estate (CRE) industry participants are already thinking of capitalizing opportunities once interest rates and inflation start to peak. The group acknowledges that any disruptions in the economy will be “short and shallow” compared to previous economic slowdowns.
4. Twin Cities add more multifamily constructions
The annual housing report by the Met Council found that 61% of the surveyed housing permits across the Twin Cities are multifamily buildings. Apartment construction has been on an uptick in recent years, which has also extended to the suburbs, according to the report. Some of the challenges to increasing housing supply, however, include the rent control policy in St. Paul and the development fees in Minneapolis.
3. Multifamily tenant outreach strategies need a compelling narrative
Panelists at the GlobeSt. Multifamily National Conference in Los Angeles last week advised multifamily operators and owners that understanding who their customers are can help in developing a compelling narrative when reaching out to them. Those who spoke at the event agreed that most operators tend to focus more on media buying without regard as to what their customers are focusing on. Instead, they should be ready with answers to tennants’ specific questions and make their marketing efforts more compelling, according to Moledo’s co-panelist Mike Whaling.
2. Chicago city officials support office-to-multifamily conversions
According to The Wall Street Journal, Chicago will be extending financial support worth tens of millions of dollars to real estate developers who will convert old office towers in LaSalle Street into residential buildings that will improve the city’s housing supply. The project aims to create 1,000 apartment units with 33% allotted for affordable housing.
1. Multifamily properties can revitalize old shopping malls
Panelists at the ULI Fall Meeting in Dallas last week recommended adding multifamily residential buildings beside older suburban shopping malls and retail centers to create best-use mixed developments. New York–based real estate investment trust company Kimco director of multifamily development, Abbey Oklak, said that this is one way of boosting retail sales when businesses face competition against e-commerce stores. AvalonBay Communities, on a similar note, continues to partner with retail developers to expand its product portfolio and also replicate the convenience of downtown residential housing in the suburbs.
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