James-Myers First Quarter 2012 Trade Activity Points to Strength of Central Texas Apartment Market

Through the first quarter of 2012, Joe James and Kent Myers successfully marketed and sold seven multifamily assets in Austin totaling 890 units and over $29 Million in sales, achieving an average of 92% of asking price

Strengthening market trends in Austin and Central Texas, and review of the national apartment market in the first quarter of 2012, support a cautioned but positive economic outlook.

Indicators of an Improving US Economy

According to the First Quarter 2012 Apartment Market Review and Outlook Live Video Webcast presented by Hessam Nadjii and William Hughes, Managing Directors of Marcus & Millichap Research and Advisory Services and Marcus & Millichap Capital Corporation, respectively, apartment market fundamentals are expected to stay strong into the second quarter of 2012, as indicators of an improving US Economy point to moderate growth:

  • Recent corporate expansion has been broad-based, with all industries adding jobs to the economy
  • Demand for apartments is very strong, particularly among 18-34 year olds who have re-entered the workforce and are now contributing to growing levels of renter demand
  • Anticipated supply of units originially slated to enter the market in 2012 remains uncertain, as the unavailability of construction lending brought a significant portion of multifamily projects to a standstill

Capital Markets Outlook

Despite continued uncertainty globally regarding a number of major factors including European credit, slowing growth in China and the impending US Presidential election, the US economy and capital markets are in significantly better shape today than in the first quarter of 2011.  In contrast to the credit shut down of 2009 and 2010, currently, there is ample liquidity in the marketplace and debt available for virtually any type of multifamily acquisition, including bridge loans for value-add properties.  For the near future, equity markets are expected to remain stable.

Multifamily Investment Trends

Investment trends today are very strong, with average trade prices in the multifamily sector showing a steady increase on a price per unit basis.  Capitalization rates in preferred US markets over recent quarters have plateaued, and capital migration into secondary markets, and B and C class properties, is on the rise, as an amazing level of demand for apartments is driving down vacancy rates across property classes.

For additonal market information in Austin and Central Texas, contact Joe James or Kent Myers at 512-338-7800.


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