WEEKLY
Mortgage Rate (30-Year Fixed): 6.61% (as of 11/17)
MONTHLY
Existing Home Sales: -5.9% (October 2022)
New Residential Sales: +17.6% (September 2022)
Median Sales Price for New Houses Sold: $470,600 (September 2022)
Construction Spending: 10.9% YoY (September 2022)
New Residential Housing Starts: 1.44 million (September 2022)
New Residential Housing Completion: 1.43 million (September 2022)
QUARTERLY
Homeownership Rate: +66.0% (3Q22)
Rental Vacancy Rate: +6.0% (3Q22)
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.
10. Atlanta multifamily market has a strong positive outlook
According to Jake Reid, managing director of Capstone Cos, Atlanta apartment fundamentals have sustained their strong performance as effective rents and occupancies both rose in the metro. He attributes the positive trend to steady employment growth and continued apartment demand because of less affordable homes for purchase. Multifamily rents increased 14.7% this year.
9. South California rent declines are just temporary, according to CEO
Rental software firm RentSpree CEO Michael Lucarelli wrote on Commercial Observer that the rent decline in the multifamily sector in SoCal is a “temporary pause rather than a lasting correction.” He attributes this to the very high cost of homes in the metro, which reached $891,770 in September, as well as issues in construction – such as labor scarcity and more expensive material costs – that contribute to the undersupply of homes. The demand-supply situation thus makes the appetite for rental spaces higher, he opined.
8. Seattle multifamily market expected to rise by year-end 2022
Biran O’Connor, executive director at Cushman & Wakefield, expects the metro-wide vacancy rate in Seattle to rise 1.7%-2% depending on the economy. By 2023, low apartment supply will still prevail as an effect of the reduced constructions starts in 2021. From year-end 2021 to June 2022, apartment vacancies fell to 1.33%. O’Connor predicts that rents will stay strong given the low vacancies.
7. Orange County multifamily market performance remain strong
According to Northmarq, the Orange County multifamily market asking rents surged higher in the last quarter by 1.3% to $2,499 per month. Rents increased 14.3% YoY. Year to date, the median price reached $366,400, while cap rates remained steady. The market is expecting a huge delivery of units as developers are preparing for the final month of the year.
6. Adaptive reuse or apartment conversions on the rise
RentCafe reported that since the start of the pandemic, 11,090 new apartment units were converted from offices, adding to more than 17,000 total new units that were transformed from other property types. Washington, D.C. has had the most apartment conversions from 2020 to 2021, making up 5.6% of the country’s total. According to Doug Ressler of Yardi Matrix, larger office buildings in central business districts are often preferred for conversion.
5. Flexible workspaces and other renter-desired amenities in 2023
In the recent MHN annual list of top amenities and multifamily features that renters desire, flexible workspaces have come out on top of the list as more renters want a home office in their apartments. Other rental amenities and features that they prefer include outdoor spaces, smart thermostats, smart access control, convenience services, pet amenities, and parking and transportation.
4. Dallas-Fort Worth market sales for multifamily properties rents remain high
Northmarq reports that the Dallas-Fort Worth multifamily property market rents have sustained an upward trend with $1,540 per month recorded in 3Q22. Although deliveries lagged in early 2022, the group expects that they will accelerate at the start of 2023. The median price has reached $190,400, similar to the 2021 level.
3. Nampa, ID needs more multifamily supply
During the Nampa Chamber of Commerce event last week, sellers reported that the number of multifamily permits issued was up by 19% while single-family permits went down by 33%. Mike Pena of Colliers predicts that the area will have a record demand for multifamily properties since the prices of homes make it harder for most renters to afford a new purchase.
2. Nashville 3Q22 multifamily market sales perform better
Sales of Nashville’s multifamily properties recovered in 3Q22 with median sales price reaching $266,000 per unit, up by 50% from the previous year. Deal volumes also increased 30% QoQ, which has influenced the price increase. Cap rates rose with an average of 4.4%, and asking rents also inched up 6.2% YoY, reaching $1,674 monthly. The group is expecting the pace of transactions to remain healthy as we head into next year.
1. Apartment demand remains strong throughout the US
The apartment rental market will stay strong in the coming year as rising inflation and the housing shortage continue to hammer the market, according to Realtor.com. Apartment construction is expected to hit a 50-year high with 420,000 new units forecasted to be completed this year. The report adds that developers have already exceeded projections for the post-pandemic forecasts for the multifamily sector.
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