|
Los Angeles, CA. The Center for Real Estate Studies (CRES) has just released their 4th qtr 2012 publication "Market Cycles". It gives a forward look to more than 150 mid-size apartment markets with “buy and sell” recommendations. “Currently the number of multifamily markets in the ‘Sell Phase” is twenty-five, according to Eugene E. Vollucci, Director of CRES. The number of multi-family markets in the "Buy Phase” is twenty-eight. Mr. Vollucci said, “Apartment fundamentals continue on track, as already-low vacancy rates dropped further and rents climbed to new all-time highs; completions are at a three-year high, so the pace of these improvements may soon be tempered. According to the Urban Land Institute, Apartment fundamentals are shining even brighter as low vacancy rates drop further and rents continue hitting new highs; completions are at a three-year high. Buyer appetite for commercial property continues unabated as prices closed in on four-year highs, cap rate compression continued, and transaction volume remained above the long-term monthly average. Economic indicators pointed to sustained moderate growth except retail sales; sales slowed even as retail Marcus & Millichap reporsts thatrRental housing remains essential for a growing population, even in periods of uncertainty and economic malaise. Conditions remain favorably aligned for sustainable, strong apartment performance. Robust demographic trends, including higher levels of immigration, the surge in echo boomers forming their own households, a further shift away from homeownership, and the growing diversity in household composition support continued demand for rental housing. In addition, economic trends maintain a favorable bias toward renting as the sluggish pace of growth slows even further and payroll expansion cools. Other factors influencing the market include the often high level of college debt diminishing the purchasing power of young people as well as the significant decrease in the net wealth of baby boomers, which has limited their ability to help with downpayments. A Cushman & Wakefield Research Publication reports that the U.S. apartment market continued to tighten in the second quarter, with overall vacancy rates declining an additional 20 basis points (bps) to 4.7% as reported by REIS, Inc. While overall absorption totaled a strong 28,350 units in the quarter, this represents the lowest quarterly total since the apartment market recovery began in the first quarter of 2010. After lagging top tier properties in the early stages of the recovery, class B/C occupancy gains continue to outpace class A properties. Class B/C absorption totaled 15,300 units, which pushed class B/C vacancy rates to 4.9%. In contrast, class A absorption totaled 11,600 units with vacancy rates declining 10 bps to 4.7%. ABOUT THE AUTHOR: Eugene E. Vollucci, is the Director of The Center for Real Estate Studies, a real estate research association and author of "How to Buy and Sell Apartment Buildings" To purchase a subscription to Market Cycles and to learn more about the Center for Real Estate Studies, please visit our web site at http:www.calstatecompanies.com
Related Articles -
midsize apartments, apartment investing, real estate, eugene vollucci,
|
