Apartment and Rental News
02/23/2010 04:31 PM
Apartment Rental News Weekly Roundup: Good News for the Rental Market
Weekly News Update
Breaking Ground
A new report from the Commerce Department showed that residential construction increased in January, driven by a 9.2 percent increase in new apartment and multifamily developments. Total construction, which includes both single and multifamily projects, rose just 2.8 percent. [Wall Street Journal, subscription]
This is an encouraging start to the year as in 2009 new multifamily starts fell 58 percent to 92,000 units and vacancy rates soared to an all time high of 8 percent.
One company that is contributing to the new starts is AvalonBay Communities, Inc., which recently announced a plan to invest around $400 million into some cities with lower than average vacancy rates. AvalonBay hopes to use the revenue from more profitable years to get a head start on the competition by targeting regions that have the highest growth potential and taking advantage of depressed construction costs. [BusinessWeek]
Home Sales Helping Apartment Demand?
Today's Market Dynamics newsletter from MPF research highlighted two regions that witnessed surprising apartment demand, Orlando and the Inland Empire. Although the regions both posted significant job loss figures for 2009, demand in the same year for apartments remained high due to drastic reductions in shadow market inventory.
Mr. Willett, of MPF Research concludes that demand for apartments in Orlando and in the Inland Empire was tied to an increase in home sales, which shot up 61 and 26 percent, respectively. Since no new jobs were added, the increase in demand for apartments was not from people moving to the area or moving out of their homes, but from a reduction in their options. As homes for rent and condos are sold, renters looked for better deals on apartments for rent in those areas.
02/17/2010 04:34 PM
Apartment Rental Match Game – Sitcoms of Yore Edition
Apartment Match Games!
Some time ago, we had a few renditions of the MyNewPlace Apartment Rental Match Game, wherein contestants would match the renter with their apartment. We had one practice round with famous personalities and their apartments and one round with reader submitted photos.
Today we are going to do a new spin on it, using famous television sets and cast members. Remember, our reader submitted contest is still on so send me your pictures to enter to win the cash and prizes for those contests.
Without further ado, here is the latest installment, match each sitcom cast with the miniature set recreations on the right. We found these great photos and set miniatures at the On the Set Flickr Account.
Leave your answers in the comments. There are hints below the pictures.
| 1) |  | a) |
 |  |  |
| 2) | | b) |
 | |  |
| 3) | | c) |
 | |  |
| 4) | | d) |
 | |  |
| 5) | | e) |
 | |  |
There are no hints down here, I was barely cognizant when these shows were on television.
02/11/2010 03:42 PM
Washington, D.C. Winter Freak Out
Apartment Life 2.0
Last week, I was prevented from visiting Washington, DC because a very large deluge of snow was going to get there before my airplane. That initial snowstorm was followed in short order by another foot of snow (relatively small compared to Saturday's storm, but relatively huge compared to that region's typical winter accumulation).
Since last Saturday, the Greater Washington area has been Ted Williamsed. Hopefully, when human technology evolves, we'll be able melt the city and will once more have a functioning Federal Government.
After hearing some dramatic accounts of the state of affairs in our nation's capital, we asked some apartment dwellers in the Great DC area how they were coping with the extreme weather. What we wanted to know, basically, was whether the weather was a welcome holiday or a serious and dangerous inconvenience.
For the most part, responses were like a famous Mitch Hedberg joke. Slightly modified for TV and this situation, it goes “[Snowstorms] are like pancakes, all exciting at first, but by the [fifth day] you're pretty sick of them."
(Photo by A Natural Sound)
The exuberance of the above picture had turned to delirium and desperation for most Washington, D.C apartment residents by Wednesday morning:
In response to normal questions about whether the metro was running, if places of business such as grocery stores, restaurants and bars were open I received the following replies, which resemble the transcriptions of a distress communiqué sent via Morse code.
From Columbia Heights, DC:
“D***: I don't know, haven't left the house today, that'd be silly; I don't think cash is useful tender anymore, though, you have to trade shovels for foodstuffs. DC has slipped into a time ceasing Murakami otherworld of unknown climatology. All watches and time keeping devices have stopped functioning; no one knows what day it is."
“M**: We found ‘ham flavored black-eyed peas' in our kitchen. We are subsisting on those and carrot juice of unknown origin and expiration date. And Google buzz."
From Silver Springs, MD:
“C***: Beer is like the only thing you can buy at the store, man!"
From Capitol Hill, DC:
“T**: I just walked home from the Trey Anastasio show at the 930 Club. It was brutal. Winds gusting up to 50 mph, my hood froze, my tennis shoes took in snow, my face froze and my pants were soaked. I almost gave up and accepted my fate of dying in a snow drift, when I saw a couple people with bags of groceries, so I think the Food Giant is open."
From Adams Morgan, DC:
“L*****: I watched “Under the Tuscan Sun," and then made spinach lasagna, chicken and stuffing, croccoli casserole and portabella roll ups. I have a chocolate cake in the oven and I'm about the make peanut butter Reese's cookies."
From Arlington, VA:
C******: I've been wandering aimlessly around the house, intermittently checking my e-mail, engaging in pointless political banter with aging frat boys via Facebook, examining the ever-worsening leak in my bathroom skylight and contemplating whether the local dive bar will be open tonight."
From Dupont Circle, DC:
B*****: I'm watching the third season of Deadwood and I'm almost caught up with my [gossip] magazine reading; for those of you in the know, that second part is a BFD."
D*****: “I'm stranded in Beirut."
Forecast for San Francisco, CA: sunny, light and breezy.
02/10/2010 06:47 PM
Apartment Rental News Top Story: MyNewPlace in Top Ten Real Estate Sites
Weekly News Update
We are very happy to announce that according to January's Real Estate report from Hitwise, MyNewPlace is now the tenth most visited site in the Real Estate Industry. Our market share increased 20 percent from last month, from 1.28 percent in December 2009 to 1.53 percent in January 2010.
(By market share we mean the percentage of the 10 million internet users sampled by Hitwise whose online activity resulted in a click to one of the thousands of sites that Hitwise categorizes as in the Real Estate Category.)
Also of note, and we covered this in some pretty extensive detail last week) was the increasing presence of ‘for rent' terms in the Real Estate category. ‘Apartments for rent' moved up to the number two spot, and both ‘houses for rent' and ‘homes for rent' moved up the list.
(See last week's articles on market share between for rent and sale search terms and interplay between homes for sale and homes for rent and the effect of long tail searches in real estate)
The perpetual and overwhelming leader in the category, Realtor.com lost ground in both its market share of website traffic in addition to as a keyword. Users searched 10 percent less this month on ‘realtor.com,' which did not affect, (less than 1 percent) of that site's overall market share.
We are still waiting to see how compete.com numbers match up with Hitwise rankings and our internal data, to see how our competition and other sites in our vertical have rebounded from real estate's seasonal trends.
02/04/2010 05:46 PM
Hitwise Real Estate Analysis: Homes for Rent vs. Homes for Sale and the Long Tail
Apartment Market Info
Yesterday, we took a broad look at the real estate vertical by comparing for rent search terms with for sale search terms and found that the market share of for rent terms had overtaken that of for sale terms in 2009. Just to review, by market share for search terms, we mean the percentage of the 10 million U.S. internet users who searched with a given keyword (search term) and from that query clicked on a site that Hitwise categorizes as part of the Real Estate Industry (of which there are a few thousand).
So, today we wanted to get a little more granular to see what specific terms or perhaps keyword and its permutations had contributed to the new trend towards renting. Yesterday, we compared all terms that included the word rent versus all terms that included the word sale to draw our conclusions; today, we are going to look at one specific term to gauge the shift, ‘homes for rent' versus ‘homes for sale.'
We saw enormous gains from ‘homes for rent' in 2009. There are two charts below, the first, shows that both ‘homes for rent' and ‘homes for sale' gained market share in 2009. However, the market share for ‘homes for rent' skyrocketed nearly 150 percent from January 2009 to January 2010, although ‘homes for sale' retains a slight edge, gaining around 41 percent in the same time period.
The second chart just shows rank by market share, and it mirrors the above chart, ‘homes for rent' jumped from 20 to 9 and homes for sale moved up one spot to 8 in January 2010.
So a big part of the gain in market share was definitely an increase in the ‘homes for rent' search term; even last year, we saw an increase in searches for single family rental homes.
Also contributing to the rise in the market share of ‘rent' terms was the gains in the search term ‘apartments for rent,' which grew from .384 percent in January 2009 to .648 percent in January 2010.
The interesting part, however, is how the long tail seems not to apply to our results. Most vexing is the fact that although the number of search terms that include the word ‘apartments' decreased from 60 to 45,, the market share of the sum of those terms increased from 1.27 percent to 1.32 percent. This trend suggests that more volume is being funneled through ‘head terms.' Else, the long tail is so long, that the top 1000 terms is not a large enough sample to really draw conclusions. What do you think?
02/02/2010 03:38 PM
Hitwise Search Term Analysis for the Real Estate Category (For Rent Queries Overtake For Sale Queries)
Apartment Market Info
In the real estate space, rent search terms surpassed the market share than sale terms in 2009, according to Hitwise Real Estate Weekly Reports, a seeming online reflection of the housing crisis. Are there a few terms that are swinging the tally or is the long tail responsible? In either case, what does this mean for marketing your properties online?
Last week, we took a look at two Hitwise's Monthly Category Reports for the real estate industry, one from December 2009 and one from July 2008. In the interest of full disclosure, we were mostly interested in how MyNewPlace was ranking among the other real estate websites. MyNewPlace entered the top 20 in July 2008 at nineteen and by December 2009, we ranked number eleven.
Today, we wanted to take an in depth look at another section of the Hitwise report, the ‘Search Term' section. We wanted to see what had changed over the course of 2009, so we pulled weekly reports from January 2009, July 2009 and January 2010.
As prologue let's define an important term that we will use throughout this analysis, ‘market share'. By Market Share we mean the percentage of the 10 million internet users sampled by Hitwise whose search queries resulted in a click to one of the thousands of sites that Hitwise categorizes as in the Real Estate Category. We will also be looking at rank (of the top 1000 search terms) and number of terms that include a certain phrase (think broad match) as well as exact phrases. Here is what we found:
First, we wanted to get an overall feel for how real estate search terms are divided between internet users who are buying versus users looking to rent. We compared the market share of the sum of all terms that include 'sale' against the sum of the market share of search terms that include ‘rent'. We found that the sum of the market share of 'sale' terms declined slightly from 2.74 percent to 2.53 percent, while the sum of the market share of ‘for rent' terms increased 46 percent, from 1.96 percent to 2.86 percent.
Second, we wanted to see the number of terms that included 'sale' and ‘rent.' A few such terms were homes for sale, remax house for sale, for sale by owner, home for sale in Waterbury, furnished apartments for rent, rental home, Chicago apartments for rent, etc. As can be seen above, the number of 'sale' terms, which decreased by 12, is still higher than the number of ‘rent' terms, which increased by 16. (NOTE- out of top 1000 search terms)
This means that market share per search term for 'sale' terms was .02 percent throughout the time period while ‘rent' terms grew from .020 percent to .025 percent. So what the hell does this mean? Basically, that of the top 1000 search terms, ‘rent' terms have more weight or more search volume than do 'sale' terms. This indicates that the for sale online vertical has a longer tail than the rental vertical. We are going to need to get more granular and check out some more graphs.
We'll pick up the discussion tomorrow as we take a look at some head terms, specifically, homes for rent versus homes for sale. Also, we'll look at the prodigious growth of ‘apartments for rent' and take a look at permutations to see whether this report accounts for the long tail at all.
01/21/2010 02:53 PM
Apartment News Weekly Roundup
Weekly News Update
Vacancy Rates Up, Rents Down
Last week Reis, Inc. reported for Q4 2009 that vacancy rates were up to 8 percent and rents were down 3 percent nationwide, indicating that indeed we are in a renter's market. The vacancy rate has skyrocketed since the all time low of 5.5 percent in Q3 2006 and is up significantly from Q4 2008's 6.7 percent.
Reis economists attribute the rise in vacancies to the fact that many renters are moving in together to save money and thereby increasing to the glut of unoccupied units. Also noted was the fact that new units continue to come onto the market. Although occupancy actually increased over the same time period the number of available apartments increased even more. This of course has a direct effect on nationwide effective rents, which have fallen 3 percent since Q4 2008 and .7 percent since Q3 2009. [CNN.com]
Affordable Housing Lawsuit Ripples Through California
A lawsuit filed against the city of Los Angeles by a multifamily developer could have statewide consequences unless Sacramento lawmakers act soon. Palmer/ Sixth Street Properties challenged a Los Angeles city law that required developers to set aside a portion of new units for below-market rates; the plaintiff argued that state law declares that the landlord has the right to set initial rental rates and therefore the city is breaking state law by requiring certain rates on any units in new apartment buildings.
Other cities have been advised that new developers could cite the legal battle if they wish not to offer affordable units in newly constructed buildings. Many city supervisors are urging the State Legislature to revise the Costa-Hawkins law to preserve affordable apartments. [Tenants Together]
01/12/2010 03:05 PM
The Correlation between Commercial and Residential Rents in New York and DC
Apartment Market Info
On the front cover of last Friday's Wall Street Journal we saw a story about data from Reis, Inc. that shows commercial (office space) rents in Washington, D.C. should overtake New York City for the highest rent per square foot in the nation.
Commercial rents declined in almost all of the 79 American cities that were tracked, with an average drop of around 9 percent. Nationwide, commercial rents are about $22.44 per square foot.
While still the most expensive city for Q4 2009, rents in New York fell nearly 20 percent to $44.69 per square foot, putting it into a trajectory that should dip below effective commercial rents in Washington, D.C., which only fell 3 percent to $41.77 per square foot. Reis, Inc. predicts that rents in New York will slip to $41.07 by the end of the year, and D.C. will drop only slightly, to $41.27.
The explanation is quite simple: the financial services sector was hit disproportionally hard by the recession (huge investment banks and brokerages that are out of business don't need office space) and the government (which needs to hire more people to figure out ways to fix the mess) has been hiring. According to one tenant-brokerage firm, 10 of the 16 largest leasing transactions in Washington last year were for federal agencies. Additionally, the government's largest department, Homeland Security, will be leasing an estimated 1.1 million square feet of office space. For those without calculators handy, that's $45.9 million a month ($551 a year) for new office space.
We, of course wanted to see if there was a corresponding shift in rents for apartments in Washington, D.C. and New York. According to MyNewPlace rent data, kind of. We found that rents for studio apartments decreased in New York and increased in Washington over the last 3 months of 2009. As the chart above shows, rents for studio apartments in Washington, D.C. increased about $370 from January 2009 to December 2009. Rents for studio apartments in New York decreased just $1 from the beginning of the year, but the second half of the year shows a much steeper trend; rent for studio apartments in New York City fell 9 percent, or $243 from July to December 2009.
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