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A Significant Cooling Nationwide

A report from WBUR in Massachusetts. “Rental prices in Greater Boston fell over the last year, according to Zillow. And it was the biggest dip in the region’s rents since the company started analyzing the data seven years ago. Zillow senior economist Sarah Mikhitarian said the rate of rent increases has been slowing down for the past couple of years, and she expects that trajectory to continue.”

“The shift in the local rental market also mirrors a ‘significant cooling in the rental market’ nationwide, according to Mikhitarian.”

From the Tennessean. “Nashville rents decreased for the second month in a row in August, after rising continuously for years. In July, median rent was $1,490 – the first year-over-year decrease in seven years. The prices do not include concessions, such as a free or reduced first month of rent, commonly offered at new properties.”

“‘Rents in Nashville are softening with the addition of new supply,’ said Skylar Olsen, Zillow’s senior economist. ‘They will continue to soften until all the new units are absorbed.'”

From King 5 in Washington. “A collection of housing developments in Seattle originally planned as apartments will now open as condo units instead. It’s a move that’s somewhat indicative of the changing housing market in Seattle that has become one of the hottest in the nation.”

“Developers for the Neighborhood Collection confirm the three buildings, Atrium (750 11th Ave. E.), Wallingford 45 (1601 N. 45th St.) and Edison (121 12th Ave. E.) will open 133 new units and be move-in ready sometime this Fall. Units average around $500,000.”

“While it’s obvious Seattle is experiencing a construction boom, 94 percent of all housing projects have been apartments over the past decade.”

The Los Angeles Times in California. “After a remarkable run-up in housing costs that has crimped budgets, it appears rent growth is slowing in Southern California and across the nation. Experts attribute the tapering in part to an increase in new apartment buildings that, although not giving tenants the upper hand, is giving them a bit more leverage than in years past.”

“The deceleration is most pronounced for more expensive rents, which is also where most of the new apartments are aimed. But data show slackening in older buildings as well. Rent growth in the Bay Area has also tapered off from the sharp increases seen several years ago.”

“Mark Hammerschmitt, who is the principal owner of Palms on the Westside of Los Angeles, said he is moderating rents now in response to the competition from new buildings opening nearby on Venice Boulevard and Overland Avenue, as well as in downtown L.A. By holding down increases and adding renovations at the 1980s-era complex such as a resident lounge and freshening up the pool area, he’s hoping to limit vacancies.”

“‘We can read the tea leaves,’ Hammerschmitt said. ‘I don’t want my residents leaving.'”

From AZ Big Media in Arizona. “Land sales in Greater Phoenix were slower in the first half of 2018 than the second half of 2017. Land sales increased more than 30 percent in 2017 but have slowed by approximately 25 percent during the first half of 2018. Median sales prices for land parcels dipped to $3.59 per square foot, which is down from $4.19 per square foot in 2017.”

“Pricing of commercial land has been somewhat volatile. The median price for commercial land was just $3.49 per square foot in the first half of 2018, down approximately 25 percent from the median price in 2017. Pricing in this category peaked in the first half of 2017.”

This Post Has 11 Comments
  1. ‘The median price for commercial land was just $3.49 per square foot in the first half of 2018, down approximately 25 percent from the median price in 2017’

    Oh dear…

  2. ‘The deceleration is most pronounced for more expensive rents, which is also where most of the new apartments are aimed. But data show slackening in older buildings as well. Rent growth in the Bay Area has also tapered off from the sharp increases seen several years ago’

    So much for the shortage. Can’t say I didn’t warn you, years ago.

  3. The blog is looking much better, Mr. Ben! I think it’s important to note that your last blog was one of the was visually appealing I’ve ever known, and that’s saying something. Some blogs are so hard on the eyes that I won’t even visit because it hurts the eyes.

  4. Oops, forgot to enter my name on the last comment (it’s not remembering my nickname).

    I just wanted to say that the new blog is looking much better, Mr. Ben! Your last blog was one of the most visually appealing I’ve ever known.

  5. Still claiming that SEattle is one of the hottest markets. OK King5 – see your reports when you change.

    On the rental front – lets bring in some Asia money
    ————-

    Singapore (18 September 2018) – CapitaLand, through its wholly owned international business unit CapitaLand International, has acquired a portfolio of 16 freehold multifamily properties[1] for US$835 million (S$1.14 billion[2]) in the United States (U.S.). It marks the Group’s foray into the country’s multifamily asset class to ride on the growing demand for long-term rental housing. The portfolio comprises 3,787 apartment units, all located in well-connected suburban communities of the metropolitan areas of Seattle, Portland, Greater Los Angeles and Denver. The price per unit of the portfolio is US$220,000, which is consistent with market transactions.
    ————-

    From King 5 in Washington. “A collection of housing developments in Seattle originally planned as apartments will now open as condo units instead. It’s a move that’s somewhat indicative of the changing housing market in Seattle that has become one of the hottest in the nation.”

    “Developers for the Neighborhood Collection confirm the three buildings, Atrium (750 11th Ave. E.), Wallingford 45 (1601 N. 45th St.) and Edison (121 12th Ave. E.) will open 133 new units and be move-in ready sometime this Fall. Units average around $500,000.”

    “While it’s obvious Seattle is experiencing a construction boom, 94 percent of all housing projects have been apartments over the past decade.”

  6. “Nashville rents decreased for the second month in a row in August, after rising continuously for years. In July, median rent was $1,490 – the first year-over-year decrease in seven years. The prices do not include concessions, such as a free or reduced first month of rent, commonly offered at new properties.”

    You mean effective rents have been dropping for months now! EBOLLAAA Nashville!!!!!

  7. Outstanding report on Seattle Rentals: https://wolfstreet.com/2018/09/21/seattle-rents-vacancy-new-construction/
    ———–
    The vacancy rate of “stabilized” properties in the Seattle metro rose to 5.2%, the highest 3rd quarter rate since 2010.

    The report projects that, “if all of the units are completed and the projects brought to market as anticipated, we could see a vacancy rate of 9.2%.”
    This would be the worst-case scenario for Q1 2019. The best-case scenario, as Apartment Insights sees it, given the estimated demand, is a vacancy rate of 7.8%, with a mid-point of 8.4%.

    Nearly 24,000 units were either under construction or scheduled for construction
    Almost 7,500 units achieved “Final Plan Approval.”
    Over 32,000 units are further up in the pipeline, with the vast majority in the review stage.

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