This week’s roundup takes a look at second-quarter 2019 construction data, multifamily borrowing and rent growth. First, NAHB reports that the elevated rental share of multifamily construction is keeping average apartment sizes below pre-recession levels, with the average per unit square footage totaling 1,103 in the second quarter. Next, MBA observes that commercial and multifamily loan originations increased 29% from the first to the second quarter of 2019 and 10% year-over-year. Arbor’s Chatter blog breaks down the composition of workers in small and large apartment buildings, noting that the former’s renters have a wider variety of occupations. Then, Scotsman Guide illustrates how metro-level population trends suggest Millennial population growth isn’t the only factor contributing to strong national apartment occupancy. Finally, RealPage analyzes rent growth in the four major Southern California markets (Anaheim, Riverside, Los Angeles and San Diego), noting that rent increases have moderated since the decade-high levels seen in 2015.
Multifamily Construction Data: 2nd Quarter 2019
NAHB – August 23
“The market share of rental multifamily construction starts held steady at 94% during the second quarter of 2019. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom.”
Commercial/Multifamily Borrowing Increased 10 Percent in the Second Quarter
MBA – August 22
“With rates even lower during the third quarter, absent a major economic disruption, 2019 is shaping up to be another record year for commercial mortgage lending.”
Small Multifamily is Home to a Wide Mix of Workers
Arbor Chatter – August 20
“Amenity-rich large multifamily is increasingly geared toward high-skill jobs within the urban core, while the more dispersed and affordable small multifamily cater to a wider mix of workers.”
Millennials Can’t Take All the Credit for Apartment-Market Growth
Scotsman Guide – August 22
“The statistics associated with this demographic only partially support the claim that the apartment market moves in step with millennial population growth.”
Rent Growth Cools Across SoCal Markets
RealPage – August 19
“The four major Southern California apartment markets averaged a decade-high rent increase of 6.6% in the year-ending 3rd quarter 2015. Since then, increases have moderated.”
