Summary
- Most U.S. multifamily markets recording occupancy improvements
- Housing affordability remains a stubborn issue as home prices hit an all-time high
- New Apple campus in Austin set to be delivered in summer 2025
- Austin’s electric-vehicle market continues to expand due to the “Tesla effect”
- Crystallized lagoon project underway in Spicewood
- 120% increase in impact fees is drastically reducing development in New Braunfels
- Sunoco’s purchase of the NuStar HQ quells fears that NuStar will leave San Antonio
- Two major San Antonio urban core projects receive key zoning change approvals
National and State News
After a Challenging Year, Things Are Starting to Look Up in the Multifamily Sector (CoStar)
- Why it matters: Multifamily demand is rebounding, easing oversupply concerns. National vacancy is expected to stabilize by the end of the year.
- The potential recovery of the market is evident in the stabilization of vacancy rates and the growth of rental prices, indicating a more favorable environment for multifamily properties after two challenging years.
- Despite a decrease in 2022, demand bounced back in 2023, and a decrease in new supply in 2024 is helping to bring balance to the market, particularly in Sunbelt markets.
- Projections suggest that the national vacancy rate for multifamily properties will stabilize at 7.8% by the end of 2024.
Most U.S. Apartment Markets Recording Occupancy Improvement (Real Page)
- Why it matters: Apartment occupancy increases show that markets across the nation are experiencing improvement.
- Despite being a slight increase, national occupancy rates saw a growth of 0.1% in April and May, in contrast to a slight decrease of 0.02% during the same period in 2023.
- Cities such as Phoenix, Nashville, and Fort Worth saw gains in occupancy, while Memphis showed an impressive year-over-year increase of 0.6%.
- Demand figures are starting to align with supply figures in numerous major cities.
Home Prices Hit a Record High (WSJ)
- Why it matters: Nothing new here – housing affordability remains a stubborn issue as home prices hit an all-time high.
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- According to the National Association of Realtors, the national median price for existing homes in May reached a record high of $419,300, based on data dating back to 1999. These prices are not adjusted for inflation, and they represent a 5.8% increase compared to the previous year.
- Despite low demand, home prices continue to rise due to the presence of high mortgage rates, which discourage potential sellers from listing their homes. This situation leads to a lower-than-usual supply of homes on the market. Moreover, sales of higher-priced homes are increasing at a faster pace than sales of mid-priced or affordable homes, which contributes to the overall rise in the median price.
- For many renters and homeowners, purchasing a home is financially unattainable. According to Yun, the mortgage payment for a buyer of a median-priced home has more than doubled since before the pandemic. In February 2020, just prior to the onset of the Covid pandemic, the median price of an existing home stood at $270,400.
Austin News
Construction giant Hensel Phelps helms multimillion-dollar project at Apple's new North Austin campus (ABJ)
- Why it matters: The estimated $400 million project demonstrates Apple’s commitment to Austin further expanding its 10,000-employee presence in the city.
- This campus, situated at 6900 W Parmer Lane, is projected to be completed in the third quarter of 2025 and will encompass three buildings spanning over 870,000 square feet.
- Apple intends for approximately 15,000 employees to operate from this facility, which encompasses a vast 133-acre site.
- In addition to constructing this campus, Hansel Phelps is also serving as the general contractor for the expansion of Austin-Bergstrom International Airport, with an added 82,000 square feet of space.
Electric vehicle supplier incentivized for potential 'milestone' project south of Austin (ABJ)
- ?Why it matters: Futronic’s potential expansion codenamed “Project Forward Motion” in the Austin area solidifies the region’s role in the EV industry.
- The Buda City Council has approved financial incentives of up to $600,000 for Futronic.
- The continued growth and job creation, commonly known as the "Tesla effect," are attracting high-tech companies to Austin.
- Central Texas is emerging as a major hub for the electric vehicle (EV) industry, with suppliers being drawn to the region due to the establishment of Tesla's factory and relocated headquarters.
Another lagoon project is headed to the Austin area — can developers make this one work? (ABJ)
- Why it matters: Crystal Lagoons’ innovative technology offers the potential to bring beach-like experiences to landlocked areas, attracting both residents and visitors.
- Situated in the Ascensions on Lake Travis master-planned community, approximately 35 miles northwest of Austin, is a sprawling three-acre crystalline lagoon development. The envisioned project aims to encompass luxury residential units, retail spaces, restaurants, concert areas, and a hotel.
- It is worth noting that a previously promised lagoon project in Leander Springs fell through due to construction targets not being met and an unclear project status.
- Ivan Manzur, the Senior Vice President of Sales for Crystal Lagoons US Corp, holds an optimistic outlook for the project. He highlights the successful implementation of the technology in Texas and expresses confidence in providing Austin residents with a distinctive beach experience.
San Antonio News
Are impact fees slowing development in New Braunfels? (SABJ)?
- Why it matters: The 120% increase in impact fees is drastically reducing development in New Braunfels.
- The decision by New Braunfels Utilities to significantly raise the costs of connecting new developments to water and sewer utilities had a major impact on developers. This led them to question whether building within the city was still feasible. As a result, development slowed down in New Braunfels in 2023. While the city connected approximately 2,400 new developments to water utilities in 2021 and 2,150 new developments in 2022, that figure dropped dramatically to just 1,068 in 2023.
- According to housing intelligence firm Zonda, new home starts in Comal County experienced a 10% decline between the first quarters of 2023 and 2024. However, when excluding the postal address area of New Braunfels, which corresponds to the service area of New Braunfels Utilities, the annual starts in Comal County saw a 23% increase during the same time period.
- Bryan Glasshagel, Senior Vice President of Advisory at Zonda, emphasizes that people still have a strong desire to be in New Braunfels. He points to its advantageous location, its proximity to San Antonio for commuting purposes, its historical and charming atmosphere, and its excellent schools under Comal ISD.
Sunoco companies purchase NuStar's San Antonio HQ (SABJ)
- Why it matters: Sunoco’s purchase of the NuStar HQ quells fears that NuStar will leave San Antonio.
- Sunoco LP, less than two months after finalizing its merger with NuStar Energy LP, has made a significant move to address the uncertainty surrounding the fate of NuStar's San Antonio headquarters. Two subsidiaries of Sunoco, Sunoco Retail LLC and Town and Country Food Stores Inc., have acquired the corporate headquarters building of NuStar, located north of The Rim shopping center.
- This purchase effectively secures the headquarters from Truist Bank, a Charlotte, North Carolina-based institution that acquired the building from NuStar for $103 million last year. Truist Bank then leased the building back to NuStar under a 20-year agreement.
- The fate of NuStar's San Antonio headquarters had remained uncertain, with Sunoco being relatively silent on the matter beyond guaranteeing the lease for the initial two years. However, the purchase of the building by Sunoco may indicate a positive outlook, as noted by Rosenblatt. He stated, "Clearly, if the company is willing to remove Truist, they must have a long-term plan for the building."
Projects from Terry Black's BBQ, Oxbow get City Council stamp of approval (SABJ)
- Why it matters: Two major urban core projects receive key zoning change approvals. ?
- Following the approval of zoning changes by council members this week, Oxbow Development Group's Mira apartment building and Terry Black's BBQ's restaurant and hotel are progressing with their respective plans. Mira, located at 1301 E. Elmira St. in Tobin Hill, will offer workforce housing, while Terry Black's will contribute to the growing hospitality scene at 2100 Broadway in the lower Broadway corridor. Both projects will have a notable impact on the evolving urban core's landscape.
