Just Released Third Quarter 2014

SAN FRANCISCO - Oct. 7, 2014 - PRLog -- The current number of markets in the “Sell Phase” is twenty-six, according to Eugene E. Vollucci, Director of CRES.  The number of  markets in the “Buy Phase” is seventeen. Mr. Vollucci states, “that this quarter the three top buy recommendations are Allentown, PA, Detroit, MI and Stockton, CA. The three top sell recommendations are Fortworth, TX, Salt lake City, UT and San Deigo, CA.”

The apartment rental market should see vacancy rates edge up from 4.0 percent in the first quarter to 4.1 percent in the first quarter of 2015, with additional supply helping to meet growing demand, according to NAR. Generally, vacancy rates below 5 percent are considered a landlord’s market, with demand justifying higher rents.

NMHC  states for the second straight year, starts of multifamily residences (5+ units) have surged in the winter and early spring months. In addition to juiced-up apartment construction forecasts, this has also led to increased concern that the wave of new supply could swamp the demand for new apartment residences. Adding to the concern is the fact that some reports have characterized apartment starts as having reached “record” levels.

Also, Demographic trends tend to unfold slowly over time—a sudden and dramatic fall in the share of single-person households, for example, is rather unlikely. Consequently, they don’t need to be closely watched as other key trends for the apartment industry such as job growth or interest rates. However, major social and economic events (the Great Depression, for example) can move the needle a little more quickly, sometimes with lasting effects. It’s been more than six years since the Great Recession began—and just over five years since the recovery officially started—so it’s worthwhile checking whether any noticeable changes have taken place.

The economy in general is doing well. Jobs are being created at the fastest rate in years, and the total number now exceeds the peak reached before the 2008 recession. The number of jobs in July was up 1.9 percent from last year. This included a 3.6 percent increase in construction jobs - still small but improving. Jobs were up 1.5 percent in manufacturing, 2 percent in retail trade, 3.5 percent in business services, 1.6 percent in healthcare, and 2.8 percent at restaurants.

Unemployment in July was 6.2 percent.

ABOUT THE AUTHOR: Eugene E. Vollucci, is  the Director of The Center for Real Estate Studies, a real estate research center He is author of four best selling books  and many articles on apartment investing,  income rentals,  real estate and taxation. To purchase a subscription to Market Cycles and to learn more about the Center for Real Estate Studies, please visit our web site at   http://www.calstatecompanies.com