Nat'l. Association of Realtors Predicts Apartment Rent Increases of 3.4% this year 4.2% next

The National Association of Realtors announced last week that apartment rent increases are expected to accelerate as the result of job creation --leading to new household formation, particularly among the young adult population who will seek their own housing arrangements. NAR chief economist Lawrence Yun said "Many will be leaving their parents’ homes, or choose to live with fewer roommates.”

The NAR expects average apartment rent to grow 3.4 percent this year and another 4.2 percent in 2012. Click here to read more.

ON Semiconductor Expands in Gresham

Gresham's ON Semiconductor has announced it will spend more than $30 million to expand its plant, adding  70 jobs by the end of the year.

Price Reduced! 10 Units in SE Portland $1,025,000

The Dogwood Court Apartments are located in Portland’s Brooklyn neighborhood and consist of eight (8) 2-bed 1-bath townhouse units of approximately 750 sq. ft and two (2) 2-bed 1-bath flats of approx. 675 sq. ft. Six (6) on-site garages bring in extra income. These clean units have been recently updated with new kitchen counters and refinished kitchen cabinets. Building upgrades include new landscaping, exterior paint and new windows. Amenities include patios/decks and laundry room.  Click here to learn more.

Demand for Bigger Down Payments Driving More People to Rent

Down payment requirements are at their highest levels since the late 90's, giving a boost to the apartment rental market a recent survey concluded.

The Wall Street Journal reported on the fact that higher down payments are shrinking the pool of homebuyers.

The median down payment in nine major U.S. cities rose 22% last year on properties purchased through conventional mortgages.  The rate represents the highest median down payment since the data was first tracked in 1997 and is double than the rate recorded three years ago.

Banks began charging high rates to increase buyers’ exposure to loss and reduces the impact of declining prices, according to the Journal. During the housing boom many home owners were required to put little to nothing down to purchase their homes.  Some submitted false or inaccurate data to support their loan requests, and later formed a class that came to be called "liars' loans."

Concurrently, home prices in the Northwest continue declining.  In the last year home prices in Portland fell 7.8% and in Seattle prices were down 6%.

Intel to Invest $3 Billion in Oregon

Intel announced plans last week to invest approximately $3 billion in Oregon and $5 billion in Arizona over the next two years.

Moments before President Barack Obama spoke at Intel’s Ronler Acres Campus in Hillsboro, Intel's CEO Paul Otellini announced the company would construct a $5 billion manufacturing factory in Chandler, Ariz. The announcement was just four months after Intel announced it would spend as much as $3 billion in Hillsboro on new construction and renovations. Read the full story online at the DJC.

1.1 Million More Renters in 2010

The latest data from the U.S. Census Bureau indicates the number of homeowners continues to fall. The nation's homeownership rate was 66.5 percent in the fourth quarter of 2010, down from a high of 69.2 percent in 2004. Q4 2010 had 1.1 million more people renting than Q4 2009.

Renters Moving Where the Jobs Are And Using The Internet To Find Their Next Home

For the first time in years, the apartment rental market is beginning to experience signs of recovery as the U.S. economy slowly begins to strengthen. Reuters reported the rental vacancy rate fell to 9.4 percent in the fourth quarter of 2010 from 10.3 percent in the July-September period—the lowest since the second quarter of 2007. Witten Advisors predicts rents will increase 4.5 percent in 2011 as operators become aggressive in raising rents with little fear of losing customers to other housing options. In response to this news, Apartments.com conducted a national survey to more than 1,800 of its January website visitors to find out about their 2011 moving plans, including reasons they are moving, when they plan to move and which tools they value most during their apartment search. With almost 30% of survey respondents looking to move for employment reasons, exactly how are these renters finding a new place to live?

According to the Apartments.com survey, renters are tapping multiple resources to find their next apartment. While 81 percent of Apartments.com visitors surveyed said they are using an Internet Listing Service (ILS) during their apartment search, they are also utilizing popular search engines, listening to recommendations from others and reading their local newspapers. Only five percent said they are using social media websites during their search. Renters ranked their top apartment shopping tools as follows:

1. Internet Listing Service (e.g. Apartments.com, Rent.com and MyNewPlace.com): (80.9%)
2. Online apartment classified listing websites (e.g. Craigslist and Oodle):(46.2%)
3. Search engines: (38.4%)
4. Word of mouth: (31.1%)
5. Local newspaper: (27.1%)

Click here to read the full press release from Apartments.com.

Report: U.S. Multifamily Starts Jump in January

Wells Fargo's Economic Group reported today that starts of new multi-family homes spiked 77.7 percent in January to a 183,000-unit pace, the second consecutive monthly increase. Permits for future starts, however, fell 23.8 percent in January. The decline in permits was likely pay back for the jump in December, which, according to the Department of Commerce, was due to builders rushing to apply for permits before new building codes became effective in January. Permits for new projects continue to run well above starts, which suggests the recent trend is likely sustainable and starts should continue to improve over the next few months. Much of the increase in multifamily starts can be attributed to demand for apartments, which has improved considerably over the past 18 months. The apartment market appears to be in full recovery. Declining homeownership rates have helped to offset the slower rate of growth in household formations. Vacancy rates have fallen modestly over the past year while rents have increased and rent concessions have fallen. Leasing in apartments is being fueled by the return of traditional renters to the market.

Shifting Demographics and the U.S. Apartment Market

The biggest trend that preoccupies most apartment companies today is the entry of the Echo Boomers into the renter market. This is the cohort born between 1980 and 1995, and they number 80 million. The “best estimate” is that there are about 15 million Echo Boomers that will enter the prime renter ago of 18 to 34 this decade, according to Kern.

“We see the entry of the Echo Boomers into that apartment market continuing for another 10 years,” says John Orehek, president and CEO of Security Properties. Read the Full Story at Multi-housing News.

Price Reduced! 12 Units in Troutdale - $719,000

This 12-unit apartment complex in Troutdale now has a reduced price.  The Mountain View apartments consist of (8) 2-bed 1-bath units and (4) 2-bed 1.5 baths all measuring approximately 950 square feet.  This complex is well maintained with newer paint and roofs.  Learn more about this property.

Apartment Market Expected to "Go Gangbusters" in 2011

The National Multi-Housing Council reports the drop in demand for homeownership has concurrently spurred demand for apartments against a backdrop of the lowest apartment starts in 40 years.  New construction is barely enough to offset the units lost to demolition and obsolescence.

Free Online Seminar Weds. 2/23 @ 1pm on Multifamily Market Trends, Interest Rates

HFO and Patti Cordon of Chase invite you to this free online seminar at 1 pm on Wednesday, February 23, 2010.  To sign up for this online seminar, click here. This one hour session will feature David S. Worley III -- Senior Vice President & Chief Risk Officer. Mr. Worley will discuss market trends, share his vision on the direction of multifamily housing and provide a look forward at Fannie Mae. Rate Specialist Srini Ramaswamy will share his perspective on interest rates.

Price Reduced! 20 Unit Apartment Complex in Gresham $1,150,000

Maple Meadows is a well-maintained apartment community. These 2-bed 1-bath units all have fireplaces, washers & dryers, individual gas heaters, and garages.  Convenient to numerous retail and employment centers.  For additional information click here >>>

Developers Unable To Deliver New Apartments In Time to Avoid Undersupply

The supply of apartments is falling seriously short of what is required to meet the increasing demand generated by renters in a slowly recovering economy, according to the National Association of Home Builders (NAHB). Read the full story in a Multihousing News special report.

Craigslist Expected To Start Charging to List Apartment Vacancies

Multifamily advertising experts say San Francisco-based Craigslist will likely move to a pay-per-post model for apartment listings in major U.S. metros, possibly within the year.

While apartment marketers have speculated a broad move to a pay-per-post model since Craigslist’s 2006 decision to begin charging $10 for brokered New York City listings, the move is more likely now, as the company has seen the pay model help significantly reduce illegitimate listings in high-volume, growth categories such as apartment and housing listings in large urban markets. Read the full story at Multifamily Executive.

Q4 2010 Portland/Vancouver/Beaverton Apartment Vacancy Rate Ranked Nation's Fourth Lowest

The U.S. Census Bureau has reported 4th quarter 2010 vacancy rate estimates for the top 75 U.S. Metropolitan Statistical Areas (MSAs).

The Portland/ Vancouver/ Beaverton area ranks 4th in the nation for vacancies at 3.9 percent. Portland's Q3 2010 vacancy rate was estimated at 4.8 percent - the new estimate shows a decrease of 0.9 percent over the past 3 months. The Census estimate is dead on with the fall 2010 Metro Multifamily Housing Association vacancy estimate of 4 percent for the Portland/Vancouver metro area.

Seattle-Tacoma-Bellevue, WA had a Q4 2010 vacancy estimate of 6.2 percent and a Q3 vacancy estimate of 8.5 percent, a decrease of 2.3 percent and the nation's 18th lowest. 

The Census Bureau reports the nation's lowest vacancy rates as follows:

• Grand Rapids-Wyoming, MI - 1.8%
• Alburquerque, NM - 2.6%
• Akron, OH - 3.8%
• Portland-Vancouver-Beaverton, OR-WA - 3.9%
• Nashville-Davidson-Murfreesboro, TN - 4.0%
• Worcester, MA - 4.6%
• Salt Lake City, UT - 5.0%
• Minneapolis-St. Paul-Bloomington, MN-WI - 5.1%
• Rochester, NY - 5.1%
• Bakersfield, CA - 5.4%

The MSA's with the five highest vacancy rates were as follows:

• Phoenix-Mesa-Scottsdale, AZ -15.5%
• Detroit-Warren-Livonia, MI - 15.6%
• Memphis, TN-AR-MS - 16.1%
• Orlando, FL - 23.6%
• Dayton, OH - 26.4%

Read the full report online.

The Risk of Attractive Nuisance Dangers on Apartment Properties

"Attractive nuisances" on your property are not so attractive! As the property owner, you are responsible for taking steps to assure that anyone who enters, whether welcome or unwelcome, stays safe. While warning signs are an excellent start, they are not enough. Property owners are encouraged to take all necessary precautions to protect individuals on the property to avoid being found negligent in a premise liability suit. Click here to download a one page PDF of the complete article. After reading this article feel free to contact Ted Stark at (503) 224-8390 x49399 for an in-depth policy review and loss control discussion.