Marcus & Millichap has released its third-quarter 2012 apartment research market report—and the trends are all heading in the right direction. The in-depth analysis predicts that vacancy in the North Texas multifamily sector will end the year at 5.4 percent. As of midyear, vacancy had tightened to its lowest level on record since 2001.
Some compelling stats from the report:
• Employment: In 2012, Dallas-Fort Worth employment growth will reach 2.8 percent with the addition of 82,000 jobs, up from 1.9 percent last year. Acceleration will be attributable in part to a turnaround in the construction industry, which will add jobs for the first time since 2007.
• Construction: Apartment completions will nearly triple in 2012, as approximately 8,100 units come online. Based on the rapidly expanding development pipeline, another dramatic increase in deliveries appears likely next year.
• Vacancy: The pace of vacancy improvement will slow through the second half as deliveries rise. Nonetheless, vacancy in North Texas will end the year at 5.4 percent, down 90 basis points from 2011.
• Rents: In 2012, asking rents will rise 3.4 percent to $823 per month. Effective rents will rise at a fast clip of 4.2 percent as owners pare concessions, pushing the average to $744 per month by year-end.
Other interesting nuggets from Marcus & Millichap:
• At midyear, approximately 12,500 apartments were under way in DFW, and another 30,000 units were planned or proposed. Next to the typical higher-growth areas, the Central Dallas submarket accounts for the largest share of planned units.
• The strongest rent gains in Dallas are occurring in the East and Oaklawn/Uptown/CBD submarkets. In the Fort Worth
area, the Grapevine and the Northwest submarkets outperformed others.
• With regard to multifamily property sales, transaction velocity rose 25 percent over the past 12 months. The most significant acceleration occurred in the 100- to 300-unit segment of the market, which is attracting a significant number of out-of-state and Canadian buyers.
Click here for the full Marcus & Millichap report.