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The Trend Is Likely To Continue

A report from GlobeSt. on Florida. “Almost unheard of in South Florida, you may see a slowdown in multifamily this year. Edward W. Easton, chairman of The Easton Group, is among those seeing a slowdown with ongoing projects going ahead but limited new multifamily development. Why?”

“He tells GlobeSt.com: ‘The cost to build is becoming too expensive and rents are becoming tapped out. If anything, I think we’ll see rents start to stabilize and perhaps come down as more product is delivered to the market.'”

The San Mateo Daily Journal in California. “Rents in San Mateo declined sharply over the last month, according to Apartment List. ‘For the Bay Area as a whole, things have definitely slowed down,’ said Apartment List analyst Chris Salviati. ‘We are talking about a slowdown in growth as opposed to rents coming down.'”

The Marin Independent Journal in California.”Prices actually fell 1.4 percent in the Tiburon/Belvedere area of Marin, which had the highest rental prices at the end of the year. ‘There is a two-tiered rental market in Marin,’ said Joby Tapia, secretary of the Marin Rental Property Association. ‘We believe that the asking prices of established, in-place rental units has actually started to soften.'”

The Associated Press on Washington. “Across King and Snohomish counties, apartment rents dropped 1.1 percent from the third to fourth quarter, the second-biggest quarterly drop this decade, behind only the 2.9 percent drop seen at this time last year.”

“Incentives are now commonplace at new buildings and becoming more prominent in older complexes that are also struggling to fill up their units. Some property managers are even offering mystery gifts to those who agree to just show up for a tour. Some rental ads spotted: 2bed home with 2.5k Amazon Gift Card and More!’ at a new build in First Hill.”

“The trend is likely to continue: The apartment-construction surge that began earlier this decade is continuing at the same brisk pace, outpacing demand for rentals. When looking at all apartments available for rent in the city of Seattle — including new ones — 10.5 percent are empty, up from 9 percent a year ago and 7.7 percent two years ago. But that’s happening not just in Seattle: Across the region, 8.6 percent of units are empty, the most since 2009.”

“In South Lake Union, 18 percent of units are empty. Vacancies hit 16 percent in the downtown Seattle core, 13 percent in First Hill, 11 percent in Queen Anne/Magnolia and 12 percent in Redmond, which is building the most apartments among King County suburbs. About 15 percent of units are empty in both Tukwila and Sammamish/Issaquah, which each just opened large new apartment buildings.”

“The Seattle area approved permits for twice as many units as the Chicago or Boston regions, which are both larger. It greenlit 25 percent more than the San Francisco region, which is bigger and has double Seattle’s housing costs.”

The Coloradoan. “More than 1,450 new apartments opened in 2018 in Fort Collins, but that’s only half of what is under development or in the city’s planning process at the start of 2019. The 1,457 units — along with 1,000 expected to open by 2020 and another 1,700 in the planning stages — are expected to exceed demand and bring the city’s rental market into balance.”

“Across Larimer and Weld counties, overall vacancy rates are at 12 percent, including properties in lease-up (new projects), according to Apartment Insights. The firm said there are a record 2,400-plus units in lease-up throughout Northern Colorado.”

“Dolores Williams owns 14 rental properties throughout Fort Collins and has had more difficulty finding renters in the past few months. She said she hasn’t raised her rents and typically charges ‘a couple hundred’ less than market rate. ‘I think it will be harder as they keep building,’ she said.” 

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        1. Proverbs 22:26-27
          Be not one of those who give pledges,
          who put up security for debts.
          If you have nothing with which to pay,
          why should your bed be taken from under you?

  4. “In South Lake Union, 18 percent of units are empty. Vacancies hit 16 percent in the downtown Seattle core…”

    These high-rise condos are only good for “dual income, no kids” professionals or retired couples. The setting just isn’t conducive to families raising children.

    “Eric Clapton – Tears In Heaven”
    https://www.youtube.com/watch?v=JxPj3GAYYZ0

      3. When we bought our house it had a really nice above ground swimming pool with a water-pump circulation and chlorine system and a beautiful faux wood deck surrounding it. We had two young children, so I told the seller to get rid of it. No f*ing way I was going to fight that daily battle or live with the potential fallout.

        1. Was looking at a house that happened to come with a pool the other day and was similarly mortified.

          Then it made me think that’s just one more reason putting in a pool is a terrible idea when you go to sell.

  6. “Dolore$ William$ owns 14 rental propertie$ throughout Fort Collin$ and has had more difficulty finding renter$ in the past few month$”

    Have no fear$ Delore$, you’re in a college town, plenty’$ of $tudents with $helter $ubsidie$:

    Local result$ for college fort collin$ colorado:

    Colorado Early College Fort Collins
    fortcollins.coloradoearlycolleges.org
    4424 Innovation Dr, Fort Collins, CO 80525

    CollegeAmerica – Fort Collins Campus
    http://www.collegeamerica.edu
    4601 S Mason St, Fort Collins, CO 80525

    Colorado State University-Fort Collins
    http://www.colostate.edu
    102 Administration Building, Fort Collins, CO 80523

    Colorado State University
    http://www.colostate.edu
    200 W Lake St, Fort Collins, CO 80521

    IBMC College
    ibmc.edu
    3842 S Mason St, Fort Collins, CO 80525

    1. Is the number of do-it-yourself landlords in the U.S. at some kind of a record level?

      “She said she hasn’t raised her rents and typically charges ‘a couple hundred’ less than market rate.”
      “She said she hasn’t raised her rents and typically charges ‘a couple hundred’ less than market rate.”

      Isn’t the market rate by definition a rent sufficiently low to attract a tenant? I’m curious why she believes her rents are hundreds below market, if she had to charge these amounts to fill her units?

    1. “This devastating indictment of the economy down under comes after aussie house prices tumbled at the fastest rate in 35 years, increasing the likelihood of a disorderly market correction and economic recession, according to global investment bank Morgan Stanley.”

      Luckily home prices always go up here in ‘Merika, or this might seem like the handwriting on the wall for us.

  9. “He tells GlobeSt.com: ‘The cost to build is becoming too expensive and rents are becoming tapped out. If anything, I think we’ll see rents start to stabilize and perhaps come down as more product is delivered to the market.’”

    Meanwhile, there’s 175 years worth of airboxes for sale, and rental vacancies are approaching 20%. Get this guy a popsicle, he’s really sharp…

  11. Amidst reports of furloughed Federal workers driving Ubers and putting off “GoFundMe” sites to beg for money (fat chance), shack sales in the Washington D.C./Northern Virginia “Panem on the Potomac” region are taking a big hit. Something like 70% of federal workers were living paycheck to paycheck due to unaffordable housing costs: if the shutdown becomes prolonged, those debt donkeys will be schlonged.

    https://www.bloomberg.com/news/articles/2019-01-08/government-shutdown-sinks-home-sales-confidence-realtors-say?srnd=markets-vp

  14. “Rents in San Mateo declined sharply over the last month, according to Apartment List. ‘For the Bay Area as a whole, things have definitely slowed down,’ said Apartment List analyst Chris Salviati. ‘We are talking about a slowdown in growth as opposed to rents coming down.’”

    Is it different in San Mateo? Are rents going up in the rest of the Bay Area?

  15. With stocks levitating daily, was the supposed bear market just a bad Christmas dream?

    DoubleLine’s Gundlach says he’s ‘pretty sure that this is a bear market’ — and it could last a long time
    By Mark DeCambre
    Published: Dec 17, 2018 12:34 p.m. ET

    DoubleLine Capital founder Jeff Gundlach on Monday said he believed that the current set up on Wall Street has all the hallmarks of a bear market. That is despite the fact that the widely accepted definition of a bear market, a drop of at least 20% from a recent peak, hasn’t taken hold in the three main stock indexes: the S&P 500 index (SPX, +0.29%) the Dow Jones Industrial Average (DJIA, +0.51%) and the Nasdaq Composite Index (COMP, +0.48%) All three of those equity benchmarks are in correction, defined as a drop from a recent peak of at least 10%. “I’m pretty sure that this is a bear market,”
    …

    1. “Gundlach also tossed some shade at Fed Chairman Jerome Powell’s rally-inspiring comments last Friday, as he said the central bank chief “went from pragmatic Powell to Powell put and the markets have been throwing a party since then.” He added that the way investor$ have been piling into the market lately looks $imilar to what was going in the credit market before the last big financial cri$is. ”

      Gundlach says this is how $tock-market inve$tors can $urvive the ‘zigzag$’ of 2019
      MarketWatch Published: Jan 9, 2019

  16. I can understand people deciding to be renters, or buyers so that at any given time it is hard to fine renters or buyers. I am a little surprised that now you can’t find either! It indicates people moving out of the area (to where?) or deciding to be homeless or live in parents basements. Maybe airbnb units coming back to the normal market. Falling rents and falling prices point to better to rent (bigly)

      1. I suppose if your house is going up in value by 20k a month there is no point to hassle with renters for a measly 2k more, so it just stands empty?

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