If the pace of the first eights months of this year holds, it would be the second highest number of apartment permits issued since 1997 when over 7,200 permits were issued.
*Multifamily permits of 5+ units
"As another September approaches and more new construction hits the market, REITs’ revenue maximization products will have to adjust their dials to deal with the new competition. And if they are to maintain the current turnover rate, rents will likely have to fall."Click to read CoStar's complete article.
“There is a segment (of the population) now where the idea of the American dream is not homeownership,” said Frick. “I think it’s flexibility.”
"Many investors have made note of the cap rate compression in the multifamily space. The American Council of Life Insurers (ACLI) reports cap rates on apartments with new mortgages made by life insurers have fallen, dropping from 8.9 percent in the first quarter of 2003 to 5.77 percent in the second quarter of 2013, a 35 percent decline and the lowest recorded by ACLI since the series’ inception in 1965.
"Yet Freddie Mac's chief economist Frank Nothaft said he believes housing values remain linked to market fundamentals and that cap rate compression in the multifamily sector may have bottomed.
"The decline in cap rates and growth in rents (adjusted for inflation) are key fundamentals that explain the rise in apartment values over the past decade,” said Nothaft. “Seen through this lens, the rise in property values appears to be consistent with overall economic forces, and the slower appreciation over the past year reflects the bottoming of cap rates. Cap rates are expected to gradually move higher in the coming year as long-term yields move higher, and rents are likely to outpace overall inflation, leaving apartment values firm and on solid ground."Click here to read the full story.
"Portland’s apartment market will continue to rank among the top-tier achievers nationally in the near term, ongoing building activity remains fairly restrained. Properties under construction at the end of 2Q total just over 3,000 units, translating to inventory growth of about 1.7% over the next 18 months or so. Those additions should be easy to digest in a metro where the Bureau of Labor Statistics reports that employment growth is progressing at an annual rate of about 24,000 positions, or 2.4%."Read the full story.
"Portland is experiencing unprecedented growth attracting a range of millennials and retirees relocating for amenities such as public transit, green space, local arts and a vibrant urban culture." --Michael Stoll, economist, professor and chair of the Department of Public Policy at the University of California, Los Angeles.Residential moves for summer 2013 were up 8.5 percent year-over-year.