Thursday, December 27, 2007
Because we talk so often to sellers and investors of multi-family real estate, we at Deaton tend to struggle with the plethora of national reports about the fall of the real estate market that consistently fail to distinguish the primary home market from the investment sector. Real estate, over time, remains one of the best investments a person can make. When values fall, savvy investors realize it's on sale.
One of our local newspapers recently published an article that speaks to the resiliency of the Triangle real estate market in relation to the more widespread trends. It's worth the read.
Relative to this, NuWire published a nice post about the makeup of mortgage rates.
Friday, December 14, 2007
Thursday, December 6, 2007
As we draw near the end of another year, it’s time to take a look at the state of the apartment market in the Triangle. Earlier this year it was all good news for multi-family owners. Our newsletter this spring explained that rents were up and vacancy rates were at a seven-year low. On a whole the apartment market is still very healthy but this time the market report includes a good-news, bad-news scenario.
According to the Karnes Research Report and the Triangle Apartment Association, there was an increase in vacancy during the six month period ending September 2007. The overall vacancy rate for the Triangle moved from 7.8% in March to 8.2% in September. This increase can be attributed to the tremendous supply-side pressures the market experienced as over 2,500 new units were added over the same six month period. The biggest hit was felt in Wake County, where the vacancy rate jumped from 6.8% to 8.1%.
The good news is rents are still moving up. The average net rent was up 1.7% from one year ago. The highest increase in rents was actually seen in Wake County, where rents soared upwards by 3.5% from September 2006 to September 2007. So while occupancy rates have taken a little dip, the market is still proving the ability to withstand rent growth.
The forecast for the coming months is a little dim. With almost 9,400 units either under construction or proposed and the onset of the historically weaker, winter leasing period, the next few months will surely test the market. Karnes Research is predicting vacancy to increase between .5% and 1.5% during the next six months.
However, lets not forget that our market still has tremendous job growth and with lenders and creditors tightening the purse strings, there should continue to be a steady influx of qualified renters in the market. Even if we do see a small increase in vacancies, the market will still be at a better than average level when compared to the last five years.