The current number of markets in the “Sell Phase” is forty-eight, according to Eugene E. Vollucci, Director of CRES. The number of markets in the “Buy Phase” is eighteen. Mr. Vollucci states, “This quarter the three top buy recommendations are Milwaukee, WI, West Palm Beach, FL and Youngstown, PA. The three top sell recommendations are New York, NY, Eugene, OR and Raleigh, NC.” according to Mr. Vollucci.
In this edition of our Market Cycles, we find the national vacancy rates in the second quarter 2019 were 6.8 percent for rental housing and 1.3 percent for homeowner housing. The rental vacancy rate of 6.8 percent was virtually unchanged from the rate in the second quarter 2018 and not statistically different from the rate in the first quarter 2019 . The homeowner vacancy rate of 1.3 percent was 0.2 percentage points lower than the rate in the second quarter 2018, but not statistically different from the rate in the first quarter 2019.
Approximately 87.8 percent of the housing units in the United States in the second quarter 2019 were occupied and 12.2 percent were vacant. Owner-occupied housing units made up 56.3 percent of total housing units, while renter-occupied units made up 31.5 percent of the inventory in the second quarter 2019.
Unemployment rates were lower in August in 5 states, higher in 3 states, and stable in 42 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Five states had jobless rate decreases from a year earlier, 2 states had increases, and 43 states and the District had little or no change. The national unemployment rate, 3.7 percent, was unchanged over the month and little changed from August 2018.
Nonfarm payroll employment increased in 5 states in August 2019, decreased in 1 state, and was essentially unchanged in 44 states and the District of Columbia. Over the year, 26 states added non-farm payroll jobs and 24 states and the District were essentially unchanged. Nonfarm payroll employment increased in five states in August 2019. The largest job gains occurred in California (+34,500), Florida (+22,500), and Georgia (+20,800). The largest percentage gains occurred in Kansas (+0.6 percent), Georgia (+0.5 percent), and Arizona (+0.4 percent). Employment decreased in August in Oklahoma (-0.5 percent).
Twenty-six states had over-the-year increases in nonfarm payroll employment in August. The largest job gains occurred in California (+314,200), Texas (+303,500), and Florida (+221,200). The largest
percentage gains occurred in Nevada (+3.0 percent), Utah (+2.8 percent), and Washington (+2.6 percent).
National vacancy rates in the second quarter 2019 were 6.8 percent for rental housing and 1.3 percent for homeowner housing. The rental vacancy rate of 6.8 percent was virtually unchanged from the rate in the second quarter 2018 and not statistically different from the rate in the first quarter 2019 (7.0 percent). The homeowner vacancy rate of 1.3 percent was 0.2 percentage points lower than the rate in the second quarter 2018, but not statistically different from the rate in the first quarter 2019. The homeownership rate of 64.1 percent was not statistically different from the rate in the second quarter 2018 nor from the rate in the first quarter 2019.
The enduring strength of the apartment market was the main takeaway of the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions for July 2019, as the Market Tightness (60), Equity Financing (56), and Debt Financing (80) indexes all came in above the breakeven level (50). The Sales Volume Index (48) indicated a continued softness in property sales, albeit with considerable disagreement among respondents.
"These latest figures illustrate that, in spite of construction levels hovering near recent highs, there remains significant pent-up demand for apartments," noted NMHC Chief Economist Mark Obrinsky. "Nearly a third (32 percent) of respondents reported stronger rents and occupancy levels, while just 11 percent indicated looser market conditions."
While the industry outlook is positive, political and regulatory threats like rent control threaten to upend regional markets. Among respondents to the NMHC Quarterly Survey, sixty-two percent operate in jurisdictions that have either recently imposed rent control or are seriously considering doing so. Of this group, a fifth (20 percent) has already cut back on investment or development in these markets, while an additional 60 percent is considering making changes in the future.
ABOUT THE AUTHOR: Eugene E. Vollucci, is considered to be one of the foremost authorities on real estate taxation and investing and has authored books in these fields published by John Wiley & Sons of New York. He is the Director of the Center for RE Studies, a real estate research organization. To learn more about the Center, please visit our web site at http://www.calstatecompanies.com