4 Multifamily Development Trends to Watch in 2019

Changing demographics, shifting social values, and evolving development landscapes all continue to drive a surging, nationwide demand for multifamily housing. With empty-nesters looking to downsize, millennials staying single longer, and a general desire for a more convenient and social lifestyle, more and more “renter-by-choice” Americans are forgoing mortgages for lease agreements.

As demand for new housing units continues to drive the multifamily sector in 2019, developers are tasked with finding new ways to satisfy the growing need for apartments.

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Source: Multifamily Executive

Southeast Multifamily Outlook Holding Strong

Several Southeast markets continue to top national lists for job and population growth, causing investors to pour capital into the region’s multifamily sector as they chase a new wave of demand that’s driving the current market expansion.

ARA and Berkeley Point Capital’s 2Q 2018 United States Multihousing Market Report includes several Southeast hubs among its top 25 for sales volume in the past 12 months: Atlanta ($7.3 billion); Orlando, Fla., ($5.6 billion); South Florida ($4.5 billion); and Charlotte/Raleigh–Durham, N.C., ($4.2 billion).

The Southeast also notched the largest per-unit pricing gains of any other region, at 8.6% year over year. Additionally, its key metros benefit from migration fueled by high income-tax–rate states, including New York, New Jersey, Connecticut, and California.

Full article HERE

Source: Multifamily Executive

The U.S. Apartment Sector Would Continue to Remain Strong Even in a Recession

Even if there is an economic downturn in the near future, the apartment sector is likely to hold up, according to industry experts.

“Apartments are still resilient against a possible recession,” says Andrew Rybczynski, senior consultant for CoStar Group Portfolio Strategy.

Though the high end of the market may be feeling the strain of overbuilding, the sector overall is benefitting from long-term trends that should continue to fill apartment units for the foreseeable future.

“In 2005 and 2006, we knew we were living on borrowed time. We knew the fundamentals didn’t makes sense,” says John Sebree, director of the national multi housing group with real estate services firm Marcus & Millichap. “Today, the apartment industry fundamentals are so strong, I don’t think a potential recession would affect us that much.”

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Source: National Real Estate Investor

Raleigh (#3), Charlotte (#13), and Durham (#16) rank in the top 35 largest metro cities with most job opportunities

35 Fast Growing Cities With the Most Job Opportunities

People are flocking to these booming cities.

If you're looking for an up-and-coming city with a growing business scene, you won't find popular destinations like New York City or Los Angeles on any list.

Rather, Texas and parts of the Mountain region are taking over and considered the "biggest boomtowns" in America.

That's according to MagnifyMoney, which looked at the 100 largest metropolitan areas around the US and their change from 2011-2016 to determine which cities have the biggest influx of people, most work opportunities, and biggest business growth based on US Census data.

To calculate the ranking, every metro was scored on a scale of 100 in three categories:

• People and housing: How many people are flocking to the area and is the metro keeping up, considering total population and housing units.

• Workforce and employment opportunities: Unemployment rates, civilian labor force, and median earnings.

• Growing industry: Rate of business and industry growth, including number of establishments and paid employees per paid period.

Each category was scored relative to other metros and looking at positive and negative changes in the area. The biggest positive change scores a 100, except unemployment rate, which was reversed in respect to the scale.

Below are the top 35 metros that showed the most people, business, and opportunity growth over a five-year period.

Source: Inc.com

Full List HERE

Charlotte — and Raleigh — among nation's 'hottest' housing markets for 2018; Here's why

North Carolina's two largest cities — Charlotte and Raleigh — are home to the "hottest" housing markets for 2018, according to a new prediction from residential real estate site Zillow.

Both housing markets ranked among the top five on Zillow's list of the nation's hottest during the current year. Raleigh placed at No. 2, while Charlotte landed at No. 4. 

In order to compile the rankings, Zillow measured six components for the 50 largest U.S. metro areas. That includes weighing home value and rent forecasts, income estimates, population growth, current unemployment rates and job opening data from Glassdoor to create a "hotness" score. 

Western housing markets and tech hubs largely dominated the list. San Jose, Calif., had the "hottest" projected market, while Seattle ranked third and San Francisco ranked fifth. Austin, Texas; Denver; Nashville, Tenn.; Portland, Ore.; and Dallas rounded out the top 10 markets.

"This list shows that just because a market is smaller or more affordable doesn't mean it isn't dynamic," said Aaron Terrazas, Zillow senior economist, in a statement. "Growing cities in the Sun Belt, places like Raleigh, Charlotte and Nashville, offer plenty of opportunities in health care and finance, while providing a less-expensive, but still-convenient, alternative to the larger and pricier markets in the Northeast."

In Charlotte, as is the case with Raleigh and seven of the other top markets, home values are expected to increase at a higher rate than the national forecast of 3.2%. Charlotte is expected to see a 4% increase in home values in 2018, compared to a 3.7% increase for Raleigh. Meanwhile, rents should climb 1.9% in Charlotte and 1.2% in Raleigh, says Zillow.

Charlotte's expected income growth of 9.4% — from a household estimate of $59,979 — registered as the highest of the top 10 markets ranked by Zillow. Raleigh trailed closely with a projected rise in income of 9%. Its recent household income was estimated at $71,685.

Raleigh's population growth of 2.3% from 2015-16 slightly outpaced Charlotte's 2% rate.

Both unemployment rates were also somewhat similar: 3.6% in Raleigh and 3.9% in Charlotte. Raleigh has 29,136 online job postings compared to Charlotte's 49,736.

This is the second time in as many months that high expectations have been placed on the Queen City's housing market in 2018.

Full Article HERE

Source: Triangle Business Journal

Promising Cities for Commercial Real Estate

Commercial real estate in the U.S. is at a turning point, with primary markets like New York, Los Angeles, and San Francisco showing signs of overheating—that’s according to online marketplace for real-estate investments RealtyMogul.com. As is common in this phase of a real-estate cycle, secondary and tertiary markets across the country are where the new action is, the firm claims. So Barron’s Penta asked its real-estate team to identify the top commercial real-estate markets that high-net-worth investors should be looking at. Here they are, in order of preference.

Number 3 and 4 on the list: Nashville and Raleigh!

Nashville. The cost of doing business in Music City, U.S.A. is 20% less than in the rest of the country, claims Helman, and that’s attracting new firms to the area. More than 200 companies have relocated to or expanded in the hip city’s metro area, accounting for 25,000 new jobs and 15 million new square feet of commercial real estate coming online in the 24 months leading up to May. Nashville also has one of the nation’s best recession hedges, as the capital of the U.S. health-care management industry, Helman says. “Whether the economy is good or bad, people still need health care,” she says. There is plenty of opportunity building multifamily housing units, as the city’s population growth outpaces the current supply of properties.

Raleigh. Highly paid young folks are moving into the city in large numbers, with the 20-year-old to 34-year-old crowd accounting for more than 23% of the city’s total population. The University of North Carolina at Chapel Hill and Duke University provide a continuous flow of budding, educated workers to Raleigh’s relatively high paying tech and pharmaceutical jobs, says Helman. They aren’t “going to have the capital to buy [a home], but will rent one,” she says. Investors should target rental apartment buildings and multifamily housing units. Homeownership is relatively affordable with the ratio of median home price to median household income higher than the national average, which is also an argument for purchasing multifamily housing units targeted at an older age group.

Full article HERE

Source: Barrron's