Winston-Salem Rooming House Ban

As of January 1, 2012 Winston-Salem will have an ordinance banning rooming houses:

The houses, where several people can rent rooms in a single-family home, will soon violate city zoning ordinance. The new ordinance requires the houses to revert back to single-family homes or remove locks on all inside doors.

“I feel that there’s not enough affordable housing in regards to the working poor and the students in town, and I feel this ordinance is going to make this difficult condition even worse,” landlord Reiner Kamper said.

Kamper owns four such houses in Winston-Salem. He said many people can’t afford to live elsewhere.

“For $100 a week rent including utilities, where are these people going to? They can’t even afford an apartment. They need to live in an apartment where people can take care of them. They help each other out, and I provide everything else for them,” Kamper said.


Winston-Salem Among 23 Housing Markets Showing Sustained Improvement

According to this report from NAHB Winston-Salem is one of twenty three housing markets in the US showing sustained improvement:

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three areas for at least six months following their respective troughs before being included on the improving markets list.

Almost 1 in 3 Adults Live With Relatives

This is an interesting article about the continued reticence of people to buy homes right now:

A sinking economy and declining home prices are eliminating urgency for most homeowners and renters to buy homes, despite record low the mortgage rates, according to a new study. But doubling up or living with adult children, relatives or parents has increased more than since the days of the Great Depression.

Nearly one in three or 30% of respondents to the Hanley Wood housing survey taken by more than 3,000  U.S. homeowners and renters said they had doubled up their living arrangements with relatives. The study provides insight on the changing dynamics in the  U.S.  housing market and the broader economy as the nation copes with the worst economic downturn since at least the Great Depression…

Both renters and homeowners strongly felt that now is a good time to buy a home with lower home prices. Slightly more than one in four or 29% of renters and 19% of owners who responded to the survey say they are considering the purchase of a new home in the next two years…

The survey also found that up to 2-million potential home buyers are waiting to purchase a home when they feel the time is right. Nearly one in four or 72% of homeowners said it was a good time to purchase a home, while only 59% of renters said they felt it was a good time to buy property.

Apartment Builders Stymied by Wait for US Government Loans

We recently posted a link to an article about GSE’s trying to get more private sector action for the single family market and in that story there was mention of Freddie Mac’s earlier efforts to do the same in multifamily.  According to this article it looks like there might be a need to get more aggressive:

A surge in single-family foreclosures combined with tighter credit markets has given the federal government a dramatically expanded role in financing new construction and rehabilitation of multifamily units.

The result is a backlog of applications. Government officials and developers say the FHA — constrained by government austerity — has had a tough time handling the demands of its new role as a cornerstone of apartment lending.

Government-sponsored enterprises including Fannie Mae and Freddie Mac now hold 41 percentof outstanding multifamily mortgage debt, up from 34 percent in 2008, according to the Mortgage Bankers Association. And the FHA expects to endorse a record $12 billion in multifamily loans in fiscal year 2011, up from about $2 billion in 2008…

As its loan volume has quadrupled, the number of FHA staff devoted to multifamily loans has dropped through attrition to 1,414 nationwide, down 13 percent since 2005. In addition, the agency tightened underwriting standards last year and began requiring more documentation.

These factors have created a traffic jam of loans waiting for approval, according to David B. Cardwell, a vice president of the National Multi Housing Council, a Washington trade group representing apartment builders. Loans that should take 60 to 90 days are delayed as long as 18 months. Builders have told the group they are frustrated by the difficulty of determining the status of their loan applications and with the lengthy approval process, complicated by tighter underwriting…

Reliance on the government isn’t likely to decrease any time soon, Cardwell said. The Mortgage Bankers Association reported last week that outstanding commercial and multi-family mortgage debt increased in the second quarter of this year for the first time in seven quarters. Government agencies increased their holdings of multifamily mortgages by $4 billion, while commercial banks increased their holdings by just $1 billion.

“The dominance of the government participation in the market is still a major component of owners’ access to reliable debt,” Cardwell said. “I think that our members and the industry as a whole still have some concern about the way banks are going to respond to the current and near-term economic conditions.”

Click here to read the whole article.

Associated Estates Realty Corp. Bullish on Apartment Biz

In a Wall Street Journal story on Associated Estates Realty Corp.’s aggressive moves in the apartment sector, it’s CEO was quoted as saying:

“I don’t recall ever being more optimistic about the apartment sector,” said Jeffrey Friedman, longtime chief executive of the company, based in suburban Cleveland.

From the same story we find a note of caution from industry analysts:

Analysts caution that, if the economy takes a nose-dive, the apartment sector will suffer with falling rents and occupancy levels.

That would likely depress the share price of Associated and other apartment-building owners.

But the apartment sector so far has been one of the strongest in commercial real estate, thanks in part to the millions of would-be homeowners deciding to rent.

In the third quarter, the national vacancy rate fell to 5.6% from 7.1% a year earlier, according to Reis Inc. That is the lowest rate since 2006.

Fannie and Freddie Floating a Plan to Juice More Private Mortgage Action

From the Wall Street Journal:

The Obama administration and a federal housing regulator are considering a program to draw private investment back into the government-dominated mortgage market by having Fannie Mae and Freddie Mac sell slices of securities that wouldn’t carry a federal guarantee but would pay a higher interest rate than current mortgage-backed bonds…

Officials see it as a step toward reducing the $10.4 trillion U.S. mortgage market’s dependence on government-controlled mortgage companies Fannie Mae and Freddie Mac.

The move would test the willingness of private investors to share the risk of funding home loans that are packaged by Fannie and Freddie. If the program were expanded significantly, it would likely raise mortgage rates over time because private investors would require greater returns than Fannie and Freddie currently do.

Under the pilot program, a small piece—perhaps 5% or 10%—of a bond issued by Fannie or Freddie would be sold without a federal guarantee, according to people familiar with the matter.

This plan for the single-family sector is similar to what Freddie’s done in multifamily:

Mr. Haldeman said the pilot program idea is “still in the talking stage.” Freddie Mac has tried the approach since 2009 with bonds issued to fund multifamily housing developments.

Administration officials say that by getting private investors involved, they will receive feedback on how much Fannie and Freddie should raise the fees they charge to guarantee mortgages. Those fees are expected to increase gradually next year.

Good News for Users of AANC’s Lease Online

Here’s some good news for all PTAA members who use the AANC lease online:

Blue Moon Forms Online for AANC customers can now capture signatures electronically for Lease documents using the Blue Moon Electronic Signature System. Electronic Signature functionality is a value added service available to AANC Online customers. Using the E-Signature functionality does not have any additional cost associated with its use beyond the standard cost of generating the Lease document. To learn how to activate this newly added feature to your account please click here. If you have any additional questions please contact your local affiliate or Blue Moon at or (512) 322-0999

Piedmont Triad Vacancy Rate Declines Most in U.S.

From a story in today’s Wall Street Journal:

Rental rates jumped 5.5% in San Jose, Calif., 4.5% in San Francisco and 3.7% in New York. Of the primary 82 markets tracked by Reis, the only one that didn’t see rates rise from a year ago was Las Vegas, which has plenty of foreclosed homes available for rent.

With millions of Americans burned by the housing crash becoming renters, landlords report few available apartment units. The vacancy rate for the third quarter, which wraps up the prime leasing season, fell to 5.6% from 7.1% a year earlier. That is the lowest since 2006…

When compared with a year earlier, North Carolina’s Greensboro/Winston-Salem region saw a 3.1 percentage point decline in vacancies, the nation’s largest. Charleston, S.C., and Austin, Texas, also saw declines near 3%.

New Haven, Conn.’s, 1.9% vacancy rate was the nation’s lowest. With 11%, Memphis, Tenn., has the highest rate, according to Reis.

Pigs, Poultry and Politics

If you’re a member of PTAA (or any other group under the TREBIC umbrella) you should plan on attending TREBIC’s Pigs, Poultry and Politics.  It’s your best chance to meet all of the candidates running for public office (state, county, municipal) in the districts that fall within the Guilford County area.  The Greensboro city council and mayoral races promise to be particularly interesting and many of the candidates will be in attendance.

When: October 13, 2011 – 4:30 to 7:00 pm
Where: Castle McCulloch, Jamestown NC
Purchase tickets here ($30 before the 13th, $35 at the door) 

Continued Strong Momentum for the U.S. Apartment Market in the Third Quarter

An excerpt from a press release issued by the MPF Research Division of RealPage:

The U.S. apartment sector again posted robust revenue growth in the third quarter of 2011, according to MPF Research, an industry-leading market intelligence division of RealPage, Inc.  National occupancy climbed 0.6 percentage points during the past three months, and effective rents jumped 1.6 percent. A discussion of the nation’s latest apartment performance results is available at …

Occupancy reached 94.8 percent as of the third quarter, up from 93.8 percent a year ago and from 91.8 percent when the market’s performance bottomed in late 2009. “While occupancy isn’t yet at an all-time high, the rate has moved a little ahead of the average level recorded over the course of the past decade or so,” Willett said. “The unusually small number of households leaving rental units to buy homes is really the key influence behind today’s strong apartment occupancy performance. Furthermore, it just doesn’t take much new demand to surpass the small block of new supply that’s coming online right now.”

Rents in U.S. apartments grew 4.2 percent between the third quarter of 2010 and third quarter of 2011. The total increase seen since pricing bottomed in late 2009 is right at 7 percent.