Archive for May, 2012

A Look at NC Apartment Construction Permits ’04-’12

One recurring question we get these days is whether or not apartment developers are “over building”, and of course the answer really can depend on many variables – the market or sub-market being assessed, current vacancy rates in those markets, market rents, etc. As a result our answer to the question is usually, “Well, it depends…” followed by all kinds of references to all of the criteria mentioned in the prior sentence. Still, it’s often useful to look at data to get a feel for how things look presently as compared to previous years.

Today we took a look at the apartment building permits issued in North Carolina in the first four months each year (January – April) from 2004 to 2012, and this is what we found:

2004 – 330 permits
2005 – 274 permits
2006 – 305 permits
2007 – 228 permits
2008 – 230 permits
2009 – 152 permits
2010 – 96 permits
2011 – 158 permits
2012 – 184 permits

As you can see the number of permits issued has almost doubled in 2012 from the same point in 2010, but you have to keep in mind that 2010 was an exceptionally low year. From the US Census’ 2011 Survey of Market Absorption of Apartments:

In 2010, there were approximately 89,100 privately financed, nonsubsidized, unfurnished, rental apartments in buildings of five units or more completed in permit-issuing areas in the United States. This is the lowest number reported since 1993 (77,200 units).

Obviously construction permits are up, and each market and sub-market will have its own vagaries, but for the most part the pace of apartment construction in North Carolina has a ways to go before it reaches the boom levels of 2004 or 2006.

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May 31, 2012 at 8:00 pm Leave a comment

ADA Compliance Deadline for Existing Pools Extended to January 31, 2013

PTAA just received a copy of the newsletter authored by Laurel Wright, Chief Accessibility Code Consultant with the NC Department of Insurance, that states that the US Department of Justice extended the deadline for existing swimming pools to comply with the 2010 ADA Standards for Existing Designs to January 31, 2013.  You can see the newsletter here:

2012TechDataV3_I3

May 31, 2012 at 6:45 pm Leave a comment

PTAA Member Chris Parr Profiled in Business Journal

The current issue of the Triad Business Journal features a nice profile of PTAA member Chris Parr:

After working as a salesman for carpet manufacturer Shaw Industries, the 1991 Appalachian State University graduate returned to Greensboro to begin his own company installing carpets at new apartment complexes. “That’s how I learned the business,” Parr says. “I was the salesman, I was the owner, I had 10 to 12 guys carpeting all of these new apartment complexes.” Parr decided to shut down that company and start building apartments. His first project was Bromley Park, a 198-unit project in Winston-Salem. Parr Investments has continued building in Winston-Salem, which he says has become an up-and-coming city. “I’m seeing this huge shift there,” Parr says. “I think there is a whole new vibe going on in Winston-Salem, and I think other people are seeing it as well.”

May 25, 2012 at 7:26 pm Leave a comment

Downtown Winston-Salem Partnership – More Housing Needed Downtown

From the Downtown Winston-Salem Partnership blog:

I have received many calls in the last few weeks from people looking for apartments to rent in downtown Winston-Salem.  Sadly, it is increasingly hard if not impossible to find a rental unit.  These new units when they are finished will surely be quickly absorbed into the apartment market in downtown Winston-Salem.  This demand has not gone unnoticed by housing developers, especially those from out of town.  The current projects under construction are this one and Winston Factory Lofts #2. 

They also provide links to all announced apartment projects.

May 22, 2012 at 9:32 pm Leave a comment

REIT for Single Family Home Rentals

Beazer Homes USA has formed a REIT that will buy and then rent single-family homes:

Beazer already had accumulated 192 single-family homes in the Phoenix and Las Vegas areas—more than 10% of them houses the company built and sold in the first place. Most were purchased at steep discounts from their original prices through foreclosure auctions, short-sales or other distressed home-buying strategies.

Those homes will go into the new company, dubbed Beazer Pre-Owned Rental Homes Inc., which hopes to expand beyond Phoenix and Las Vegas to at least one other, as-yet unidentified market. Within two years, Beazer said the number of rental homes under the new REIT’s control could number in the thousands.

“It’s not a short term, opportunistic thing,” said Allan Merrill, Beazer Homes’ chief executive, who is chairman of the new rental venture. “It’s not buy as many as you can, lever it up as far you can, and flip them as soon as you can. It’s building a durable rental stream.”…

REIT experts say that similar companies could follow, especially if the Beazer venture is successful. According to Census Bureau data analyzed by Green Street Advisors Inc., there are about 25.5 million single-family rental properties—defined by Green Street as houses with between one and four units—in the country, compared with just 18 million rental apartments in buildings with five or more units.

“Given the sheer size of the single-family rental inventory in this country and the capital now lining up to play in this space, I would be surprised if we don’t see multiple single-family REITs formed in the next several years,” said Andrew McCulloch, a managing director with Greet Street.

May 11, 2012 at 8:58 pm Leave a comment

President of the Richmond Fed Visits Greensboro, Shares Insights

Monday evening Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, hosted a dinner at the Proximity Hotel in Greensboro for leaders from the Triad business community.  He shared several insights about the current state of the economy, and among his more interesting comments were:

  • That the persistently high unemployment was largely due to a mismatch between unemployed workers and the skills that potential employers are looking for. He gave several statistics to support his statement, and pointed out that unlike past recessions we will not be able to “spend our way” out of this recession.
  • He highlighted several of the programs that Guilford Tech and other community colleges in North Carolina have created to help address the skills gap
  • During a Q&A session after his speech he remarked that he thinks it will be years before housing rights itself. He noted a significant overhang in the single family residential market, and predicted it would take several years at a minimum for the the existing inventory to be absorbed and for SFH construction to begin to return to historically normal levels.
  • He also noted that this recession, caused by the bursting of the housing bubble, has likely altered the psychology of the younger generation. Home ownership is no longer perceived to be the risk-free, American ideal it was seen as during the heyday of the housing bubble and this will likely have a long term affect on the housing market.

May 10, 2012 at 6:42 pm Leave a comment

Gap Between Wages and Rent Concerns NC Housing Coalition

From The Dispatch (Lexington):

According to a press release by the North Carolina Housing Coalition, 27 percent of Davidson County residences rent. Due to Davidson County’s mean renter hourly wage of $9.32, the average single adult can only afford $485 in rent taking into account their housing allowance is 30 percent of their monthly income. With Davidson County’s average two-bedroom modest housing unit at an average price of $620, it would take at least two contributing incomes or one individual working for 56 hours per week. These numbers for Davidson County are lower than the North Carolina average at $12.11 hourly wage, which is $1.52 per hour less than needed to afford a two-bedroom, fair market rent apartment.

This is the first year the data was compiled by American Communities Survey, instead of the 2000 Census data, and therefore the numbers cannot be compared to years past. Going forward, the fair market rent number will more accurately reflect the economy, said Anne Ehlers, communications coordinator for the N.C. Housing Coalition. In response to the data, Ehlers admits that the rental prices have been stable, but also points out that jobs have been eliminated or hours cut due to the economy therefore affecting an individual’s ability to afford a two-bedroom apartment.

Obviously the Triad’s unemployment and underemployment situation continues to be a concern, from the consumer and management standpoint.

May 4, 2012 at 3:11 pm Leave a comment

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