Excerpt from the 2Q18 Witten Advisory: The federal government has certainly launched policies that have helped lift economic growth, not just the new tax law but also reducing regulation across industries. The economy’s strength has also led the Fed to raise short-term rates, and one key reason that the Fed is more confident about raising…
DetailsExcerpt from the 2Q18 Witten Advisory: This supply/demand scatterplot shows most markets clustered near the green dashed line where demand growth (on the horizontal axis) matches supply growth (on the vertical). With new deliveries having ramped up in most markets, we’re now at the stage of the cycle where completions are running slightly ahead of…
DetailsExcerpt from the 1Q18 Witten Advisory: The above chart highlights that new supply growth rates are down in most markets, albeit by a narrow majority. With starts through February, Charlotte outpaces all markets with new inventory growth of 5.5% – up sharply from a year ago. Similar ramp-ups also occurred in Austin, Portland and Nashville, though…
DetailsExcerpt from the 1Q18 Witten Advisory: There are a number of reasons not to be concerned about mass moveouts from the apartment market to homeownership. Some of the obstacles to buying a home are highlighted in the above charts. Even for renters who want to purchase a house, the options are very limited. The upper…
DetailsExcerpt from the 4Q17 Witten Advisory: This chart looks at the number of jobs added in each market per apartment absorbed. The blue columns represent the total number of jobs in each metro divided by the number of occupied apartments there. The range is roughly 4 to 8 jobs per apartment. Then, the blue line…
DetailsExcerpt from the 4Q17 Witten Advisory: Although households are becoming more likely to buy, the orange slices in the above chart show that for-sale inventory is increasingly scarce. The U.S. now has nearly 200,000 fewer vacant single-family owner units than normal. In addition, this dearth of for-sale product is growing quarter by quarter. Single-family starts…
DetailsExcerpt from the 4Q17 Witten Advisory: For the U.S. and across the globe, economic growth has been accelerating since the middle of 2016, rising toward 2½% through the 3rd quarter. This solid and steady expansion has resulted in lots of jobs being generated, as we see in the above chart. Following the trend of improving…
DetailsExcerpt from the 4Q17 Witten Advisory: This chart illustrates the key comparison of demand versus supply. Net absorption continues to run at a pace of about 200,000 units per year – the same demand volume we’ve seen since 2015. The red wave of net completions has ramped up in the last few years and, so…
DetailsExcerpt from the 3Q17 Witten Advisory: We know developers are a smart and ingenious group and, even while banks pulled back on proceeds and terms, they’ve been able to keep production elevated, which can be seen in the above chart. However, the last six months appear to be showing the effects of multiple headwinds –…
DetailsExcerpt from the 3Q17 Witten Advisory: Single-family rentals transitioning back to the for-sale market has probably been a contributor to the rising homeownership rate, as shown in the above chart. After four consecutive increases, the homeownership rate is approaching 64% for the first time since 2014. As the inset graphic depicts, homeownership is higher now than…
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