Apartment Trends to Watch
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Here are seven stories about apartment market and investment trends in the Puget Sound region. This is a summary of our presentation on Wednesday to the Rental Housing Association of Puget Sound at their annual Spring Workshop. Fasten your seatbelt. That presentation was 70 minutes but we'll whisk you through the key points in this 8 minute video.
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Apartment Trends to Watch
- 1. Dupre + Scott Apartment Advisors www.duprescott.com
- 2. 7 STORIES TO TAKE AWAY TODAY: • The intertwined couple • The 3 rules of development • The iHome • Justin time • Leave it to Beaver • The “Geezer Effect” • 3 rules of forecasting
- 4. Capitalization rate: monthly (Tri-county; 5+ units) 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- 00 01 02 03 04 05 06 07 08 09 10 12 13 11 Source: Dupre + Scott www.duprescott.com
- 5. Sales volume: monthly (Tri-county; 5+ units) 564 $450,000,000 600 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-12 Feb-13 Feb-11 Source: Dupre + Scott www.duprescott.com Source: Dupre + Scott www.duprescott.com
- 6. Price per unit: monthly (Tri-county; 5+ units) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- Feb- 07 00 01 02 03 04 05 06 08 09 10 12 13 11 Source: Dupre + Scott www.duprescott.com
- 7. Interest rates & capitalization rates 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 2003 2000 2001 2002 2004 2005 2006 2007 2008 2009 2010 2012 2013 2011 Source: Dupre + Scott www.duprescott.com
- 8. 3 rules of development
- 9. New units opened each year (Tri-county) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2011 1992 1997 2002 1987 1988 1989 1990 1991 1993 1994 1995 1996 1998 1999 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 Source: Dupre + Scott www.duprescott.com
- 10. The iHome
- 11. Apartment unit size trend (Net rentable square feet; 20+ unit properties) 1,000 900 800 700 600 500 400 1905 2005 1890 1895 1900 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2010 2015 B Source: Dupre + Scott www.duprescott.com
- 12. Justin Time
- 13. Annual increase in 20-34 year olds’ (King, Pierce, Snohomish counties) 875,000 850,000 825,000 800,000 775,000 750,000 725,000 700,000 675,000 650,000 625,000 600,000 2011 1995 2014 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2015 2016 Source: Dupre + Scott www.duprescott.com
- 16. The Geezer Effect People turning 65 each year (Puget Sound region) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2008 1990 1992 1994 1996 1998 2000 2002 2004 2006 2010 2012 2014 2016 2018 2020 Source: Dupre + Scott www.duprescott.com
- 18. New versus “old” - rents (1 BR; In-city Seattle; 20+ units) 1,800 Older 1,600 Newer +46% 1,400 1,200 +36% 1,000 800 600 2009 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 2012 2011 Source: Dupre + + Scott www.duprescott.com Source: Dupre Scott www.duprescott.com
- 19. Mortgage payment as % of rent (King County; 20+ units) 300% 275% 250% 225% 200% 175% 150% Mortgage/Rent 125% Long term average 100% 1992 2006 1980 1982 1984 1986 1988 1990 1994 1996 1998 2000 2002 2004 2008 2010 2012 Source: Dupre + Scott www.duprescott.com
- 20. Vacancy forecast: Tri-county (King, Pierce, Snohomish counties; 20+ units) 8.0% Gross 7.5% Market 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% Dec 12 Jan 14 Jan 15 Jan 16 Jan 17 Source: Dupre + Scott www.duprescott.com
- 21. Rent forecast: Tri-county (King, Pierce, Snohomish counties; 20+ units) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% Dec 12 Jan 14 Jan 15 Jan 16 Jan 17 Source: Dupre + Scott www.duprescott.com
- 22. 7 STORIES TO TAKE AWAY TODAY: • The intertwined couple • The 3 rules of development • The iHome • Justin time • Leave it to Beaver • The “Geezer Effect” • 3 rules of forecasting