Economic & Industry Update - February 24, 2021 - National Apartment Association
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February 24, 2021
Economic & Industry
UpdateEconomic Impacts
January Jobs Report
10,000 15%
• After job declines numbering
5,000
227,000 in December, just
0
49,000 jobs were added in
10% January.
• During the past 3 months
Thousands
-5,000
(November-January)
-10,000
leisure/hospitality has shrunk
5%
-15,000 by 587,000 positions as total
non-farm payroll
-20,000 employment across the U.S.
Monthly Job Change Unemployment Rate increased by 86,000.
-25,000 0%
Source: U.S. Bureau of Labor StatisticsEconomic Impacts
NAHB/Wells Fargo Housing Market Index
100 1
Seasonally Adjusted Percent Change, Monthly
90 0.9
80 02/2021
0.8 • Homebuilder confidence
70 0.7
inched up to 84 points in
February.
60 0.6
• Buyer traffic was the
50 0.5
strongest sub-component,
40 0.4
increasing 4 points, while
30 0.3 sales expectations fell, likely
20 0.2 due to challenges caused by
10 0.1 materials cost increases and
0 0 low levels of supply.
Source: NAHB/Wells Fargo Housing Market Index, February 17, 2021Economic Impacts
University of Michigan Consumer Sentiment Index
120.0 1
0.9
100.0
0.8
• Initial estimates of consumer
02/2021 sentiment in February fell to
0.7
80.0 their lowest level since
0.6
August.
60.0 0.5
• The sub-component
0.4
measuring expectations fell
40.0
0.3 markedly, particularly for
20.0
0.2 households with incomes
0.1 below $75,000.
0.0 0
Source: University of Michigan, February 12, 2021Economic Impacts
NFIB Small Business Optimism Index
115.00 1
0.9
110.00 • The Small Business Optimism
0.8
01/2021 Index experienced its third
105.00 0.7
consecutive monthly decline.
0.6
100.00 • The greatest contraction
0.5 occurred in the index
95.00
0.4 component measuring the
90.00 0.3 outlook for business conditions
0.2 over the next six months – now
85.00
0.1
at its lowest level since 2013.
80.00 0
Source: National Federation of Independent Businesses; Moody’s AnalyticsEconomic Impacts
New Home Sales
1200 1
Thousands of Units Sold, Seasonally Adjusted
0.9
1000 01/21
0.8 • January new home sales
0.7
were up 4.3% over the
800 month and 19.3% over the
0.6
Annual Rate
year, beating expectations.
600 0.5
• Upward revisions were also
0.4
400
made to the prior three
0.3 months.
200
0.2
• The median new home price
0.1 increased 5.3% year-over-
0 0 year.
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Residential Sales, February 24, 2021Economic Impacts
S&P/CoreLogic Case-Shiller 20-City Composite Home Price
Index
20.0 1
Year-over-Year Percent Change, Seasonally
15.0 0.9 • The S&P/CoreLogic Case-
10.0 0.8
12/20
Shiller 20-City Composite
0.7 Home Price Index increased
5.0
0.6
10.1% in December, the
highest gain since 2014.
Adjusted
0.0
0.5
-5.0
0.4
• Nine markets posted double-
-10.0 digit increases led by
0.3
-15.0 Phoenix, Seattle and San
0.2
Diego.
-20.0 0.1
-25.0 0
Source: S&P Dow Jones Indices LLC, S&P/Case-Shiller 20-City Composite Home Price Index, retrieved from FRED, Federal Reserve Bank of St. Louis; February 24, 2021Economic Impacts
Housing Permits
1400 1
Thousands of Units Seasonally Adjusted Annual
Single-family Multifamily
1200
0.9 • Multifamily permitting activity
0.8 soared in January, reaching
1000 0.7 its highest level since 2015 at
0.6 557,000 seasonally adjusted
800
0.5
annual units.
Rates
01/21
600
0.4
• Single-family permits topped
one million for the sixth
400 0.3
consecutive month.
0.2
200 • Permitting activity remained
0.1
strongest in the South and
0 0
West regions.
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Residential Construction, January 21, 2021Economic Impacts
Housing Starts
1400 1
Thousands of Units Seasonally Adjusted Annual
Single-family Multifamily
0.9
1200
0.8
1000 0.7 • Multifamily starts topped
0.6
400,000 for the first time
800
01/21
since July but are off 35%
0.5
Rates
600
year-over-year.
0.4
• Single-family starts cooled in
0.3
400 January but remained above
200
0.2
one million units.
0.1
0 0
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development, New Residential Construction, January 21, 2021Economic Impacts
Back to Normal Index
Feb 29 2020=100, Not Seasonally Adjusted • The Back to Normal Index
120 tracks twelve high frequency
data series plus monthly
100
employment figures, using
80 2/17/21 February 29, 2020 as the
baseline for “normal.”
60
• The index rose during the
40 seven-day period ending
February 17th despite
20 weather disruptions across
the country.
0
• 39 states posted an increase
while the remainder
declined.
Sources: CNN Business, Moody’s AnalyticsCommercial Real Estate Industry Impacts
• In the latest NAIOP Coronavirus Impact Survey released in January, commercial real estate
professionals were generally more optimistic, with fewer respondents now expecting the pandemic will
significantly affect their business operations for more than a year.
• Although showing improvement from prior surveys, 69% of responses indicated development projects
were still being disrupted by permitting and entitlement delays.
• Respondents reported a cooling in both multifamily acquisition and development activity since the last
survey in September.
• Multifamily collections slipped slightly with 79.6% of respondents reporting 90%+ on-time collection
rates.
• Nearly two-thirds of multifamily respondents reported fewer than 10% of residents requested rent relief
in January.
Source: NAIOP Coronavirus Impact Survey, January 2021Apartment Industry Impacts
Hardest Hit Metro Areas for Rent Collection
(Percent of Households Making No Payment Through February 20)
New Orleans-Metairie, LA
Las Vegas-Henderson-Paradise, NV
• The bottom ten markets for
rent payments generally
New York-White Plains, NY
change little from week to
Seattle-Bellevue-Everett, WA week.
Baltimore-Columbia-Towson, MD • Rent payments were down
San Jose-Sunnyvale-Santa Clara, CA from year-ago levels in 45 of
Portland-Vancouver-Hillsboro, OR-WA
the 51 markets tracked by
RealPage.
Greensboro/Winston-Salem, NC
Charlotte-Concord-Gastonia, NC-SC
Kansas City, MO-KS
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
Source: RealPage, Inc. Rent Payments February 1-20, 2021.Apartment Industry Impacts - Student
Top 5 Universities For Year-over-Year Growth in
Percentage Preleased
(As of December 2020)
30.0%
25.6% 25.4%
25.0%
24.5% 24.2% • The Fall 2020 preleasing
20.8% period ended in September
20.0%
at 88.7%, 5.5% below the
15.0% prior year.
10.0% • Preleasing for the Fall 2021
school year is off to a slow
5.0%
start, at 29.5% preleased as
0.0% of December.
University of New University of University of Pennsylvania Saint Louis
Hampshire-Main Louisiana at Georgia State University- University
Campus Lafayette Main Campus
Source: National Student Housing Report February 2021 by Yardi MatrixApartment Industry Impacts – Student (cont.) • Year-over-year prelease occupancy growth as of December was driven mostly by large public universities, indicating strong demand among more affordable universities. • The universities that are struggling the most with preleasing are those in expensive major markets and those that opted for primarily online instruction. • 11,338 units are currently under construction, with most construction concentrated at large universities across the South and Southwestern regions. • Overall, there is optimism about student housing with increased vaccine distribution and as students return to campus. Source: National Student Housing Report February 2021 by Yardi Matrix
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