I'd imagine that some apartment investors with long-term bets on the rental market are feeling somewhat vindicated by the news that, at least according to data tracker RealFacts (an alliance partner to MetroIntelligence and Beacon Economics), rents and occupancy levels continued to hold up during the third quarter of 2008. From an AP story via the L.A. Times:
Apartment rents, as well as apartment occupancy, across the country were virtually unchanged in the third quarter of 2008, according to RealFacts, a San Francisco-based apartment data research firm.
And while more than a million homes have been lost to foreclosure in the last two years and with banks readying for another 1.5 million repossessions, apartment buildings have remained solvent. To date, there have been virtually no foreclosures on large apartment buildings, according to RealFacts...
In the San Francisco Bay area, with one of the highest housing prices in the country, average rents for the third quarter were $1,637, or 1.2 percent higher than the $1,618 they cost per month in the second quarter.
In the Riverside-San Bernardino area of southern California, which has one of the highest foreclosure rates in the country, rents were $1,157 in the third quarter, slightly down from $1,162 in the second.
And in the Las Vegas area, also hit hard by foreclosures, rents were $887 in the third quarter and $886 in the second...
The data collected by RealFacts comes from more than 3 million apartments in complexes of 100 units or greater.
Click here for full story.
Friday, October 24, 2008
As stocks and home prices crater, apartment market remains strong
Wednesday, June 11, 2008
RealFacts joins MetroIntelligence and Beacon Economics in new alliance
Following several months of negotiations, we're very pleased at MetroIntelligence to announce the latest in a series of strategic alliances with RealFacts, a leading provider of data for investment-grade apartment communities in multiple states throughout the U.S. This new alliance, forged along with Beacon Economics, will allow both companies to tap RealFacts' proprietary database and software for market studies, speeches and articles on economics and the housing market.
With its 15-year history of data for individual apartment complexes, RealFacts provides a much greater level of specificity than its competitors, and since we've been using their data for apartment-related market studies since the early 1990s, we thought an alliance would make a greaf fit.
Each quarter, RealFacts re-surveys 96% of their entire database, which now totals 3 million units in 12,208 complexes totalling 2.6 billion square feet of residential space. And, with 136 separate fields in each RealFacts project profile, their clients generate more than 2,000 reports each week.
Monday, April 7, 2008
Apartment cap rates down; prices rise in 2007
According to our friends at apartment data provider RealFacts, 2007 was much better for the multi-family rental market than it was for new home sales. The company, which tracks apartment data for over 12,200 investment-grade apartments in multiple markets and states, is still crunching numbers for 2007 but has provided some preliminary conclusions in their latest newsletter:
Although 2007 has ended, we are still researching apartment sales transactions for that year. As of early March, we had found details of 1017 sales. Chances are we will find some more in the coming months, but we certainly have enough to spot some trends.
The first conclusion we can draw is that sales volume is more or less unchanged from the previous year. We have 1027 sales of complexes in the database for 2006, strikingly similar to the number of sales for 2007. Since our database covers 12.200 complexes, that suggests that 1% of apartment complexes change hands in a year.
Generalizing about a database that covers so many different MSAs is dangerous, because it blurs the details of individual markets. But let’s live dangerously and say that prices per unit and per square foot have gone up in 2007 while cap rates have gone down. The following table summarizes the changes state by state,
| 2007 | 2006 | |||
| State | Av.CapRate | Av.PPU | Av.CapRate | Av.PPU |
| AZ | 5.8% | $93,025 | 5.9% | $79,223 |
| CA | 5.3% | $181,161 | 5.1% | $177,043 |
| FL | 6.0% | $93,997 | 6.5% | $109,401 |
| CO | 5.0% | $92,605 | 4.9% | $90,587 |
| IN | 6.8% | $53,891 | 7.3% | $58,243 |
| KS | 6.5% | $74,709 | 6.8% | $86,192 |
| MO | 6.5% | $53,066 | 6.9% | $53,475 |
| NV | 5.3% | $123,987 | 6.0% | $123,386 |
| NM | 6.5% | $90,159 | 6.8% | $60,907 |
| OK | 6.4% | $33,879 | 7.2% | $39,309 |
| OR | 5.0% | $102,440 | 5.8% | $87,500 |
| TX | 6.8% | $62,379 | 7.3% | $60,268 |
| UT | 6.2% | $89,394 | 7.0% | $50,436 |
| WA | 6.0% | $122,720 | 5.2% | $110,528 |
To continue with this dangerous act of generalization, we can say that prices have been going up and cap rates down in the twenty-first century. The exception to the trend came in 2005, when prices went up so fast due to sales to condo converters that they fell in 2006. In future newsletters, we’ll look in more depth at sales in some specific markers, where there have been high numbers of transactions.
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