Archives for June 2015

Apartment homes are filling up nationwide. The national occupancy rate in May reached 95.3 percent, the highest ever, reports Axiometrics, a real estate analytics firm.
“The May rate historically is the start of each year’s occupancy peak, meaning occupancy should remain at the current level or higher,” says Stephanie McCleskey, Axiometrics’ vice president of research.
Higher apartment occupancy rates have come with higher rents. In May, rents rose 5 percent nationally, making it the fourth consecutive month at or above that mark.
“Owners and investors are having a profitable start to the year,” McCleskey says.
Apartment demand has been high from millennials who are forming their own households as well as baby boomers looking to downsize, CNBC reports.
Laurie Goodman, director of the housing finance policy center at the Urban Institute, recently published a paper claiming that the rental surge will only get bigger. Goodman predicts that out of the 22 million households formed in the next 20 years, 13 million will be renters.
“We are nowhere near building enough to meet demand,”  Goodman says.
(Continued from CNBC)
(click to enlarge) Flats at Bethesda Avenue in Bethesda, Maryland
In the vibrant downtown of Bethesda, Maryland, a short bike ride from the D.C. line, developers are readying to cut the ribbon on 162 rental units in what is being called the Flats at Bethesda Avenue. It is part of a new mixed-use development that includes high-end retail, restaurants and multimillion-dollar condominiums, all in the heart of the downtown, which has already undergone a revival in just the past five years.
The lowest price point at the Flats is $2,200 per month for a studio. The most expensive unit is $6,000 a month. The area, which saw little to no apartment construction during the recession, is now booming.
“We’ve had a surge here over the last nine or 10 months, and it’s really taken off. People were concerned about oversupply, but the absorption has been great, and it’s really across the board,” said Douglas Firstenberg, principal of StonebridgeCarras, the real estate development and investment firm behind the project. “There is really a growth in demand in, the term we’re using, ‘rent by choice.’ The older renter who is looking to downsize and doesn’t want to own anymore.”
Firstenberg estimates that more than half of those who have signed leases so far are over the age of 50. They want to be in the middle of an urban area. It is a phenomenon driving development of new urban cores outside major cities as well as new walkable developments in the nation’s downtown areas. Still, it is not happening fast enough.
“There is no question we have a shortage of housing,” added Firstenburg.
The supply issue will vary market to market and price range to price range. Some local municipalities require developers to set aside some units as “affordable,” but the bulk of new renter households will likely be among lower-income families, and those units are not nearly enough.
“The thing to realize about this millennial generation is it’s much more racially, ethnically diverse than the boomer generation, and that means less homeownership. The rate for African-Americans and Hispanics is lower than it is for whites by a considerable amount,” said Goodman.
Rising rents are continuing to put a strain on U.S. households, making up a far larger monthly share of expenses. While multifamily construction last year soared to the highest level since 1989, the timeline for these buildings is longer than for a single-family home, and the rental population is growing ever faster.
Higher rents may drive some to homeownership, but only if renters can save enough for a down payment; that, too, is getting harder.
“Real wages have been absolutely flat for about the last 20 years and actually down for that critical 25-34 age group, student loan debt, particularly for those that don’t finish school is really important, and then finally the question is, has there been a subtle change in attitudes toward homeownership?” asked Goodman.
Source: “Apartment Occupancy at All-Time High: Here’s Why,” CNBC (June 18, 2015)
By: REALTORMag
Click here to view source article.
 

At the LIN June 2015 Meeting on June 17, 2015, ten excellent properties were presented. Thank you for presenting properties and attending the meeting! Thank you to our host, 3900 Pan American Freeway NE.
View June LIN properties here.
View June LIN Meeting PowerPoint Presentation here.

Based on our recent study “Widening Wealth Inequality”, we found that although there are gains in housing wealth in recent years from rising home prices, fewer people benefit because of the decline in the homeownership rate. Hence, wealth inequality increases in the United States.
But how did housing wealth change at a local level between 2011 and 2013? Based on the American Community Survey (5-year estimates of median home value), the visualization below presents estimated housing wealth gains/losses by zip code, metro area and state. The change in wealth includes the change in median home values (2011 – 2013) and an estimate of principal accumulated.
Much has changed since 2013.  Nationally, housing prices have risen by about 15 percent since then and much of the increase in home prices has been seen in zip codes that showed large losses as of 2013, as seen below.  Still, this study is useful in showing the geographic distribution of gains, which were generally widespread even after the housing bust, and losses, which like the largest gains were mostly concentrated.  Note, two zip codes form the San Jose metro market made it to the top-10.  At the same time, one zip code from San Jose was in the bottom-10.  Even within a metro market, there appears to be a sizable variation on which zip codes thrive or not.
From a sample of 12,763 zip codes, here is a summary of the zip codes with:
a) Higher gains in housing wealth (2011-2013): (click on image to zoom)

 
b) Higher losses in housing wealth (2011-2013): (click on image to zoom)

Check below to see whether your zip code experienced gains or losses in housing wealth for the period 2011-2013:
Click here to view source article with interactive map.
By: Nadia Evangelou (Economists’ Outlook)
Click here to view source article.

NAR Featured on Commercial Radio Show: Hear about the benefits of association membership in the Commercial Real Estate Show. Listen now for thoughts from Jean Maday, NAR’s director of commercial services, who joined leaders from SIOR, NAIOP, and BOMA.

Associations for Success (Part Two of a Two Part Series – see below for Part One)
Whether it be leadership, education, networking, or designations, the benefits of association membership are numerous. This is part two of a series to explore associations that may catapult your business!
Click here to listen to Associations for Success (Part Two of Two Part Series).

Associations That Matter (Part One of Two Part Series)
Associations are a great way to network, build relationships, enhance skills and do more business. The question is which associations are best for you and how can you get the most from your involvement.
Michael interviews leaders from top national commercial real estate associations about how their latest resources can benefit your business. This show is part one of a two part series.
Click here to listen to Associations that Matter (Part One of Two Part Series)
By: Michael Bull, CCIM (Commercial Real Estate Show)
Click here to view source article.