It should come as no surprise that DFW has risen to one of the top 10 markets in the US for multifamily permits. The chart below tracks total multifamily permits against annual job gains for these markets.
What is important here is that is that DFW is one of the strongest job markets in the country. We’ve commented many times that we’ve been adding jobs at a better than 100,000-per year clip for a few years now. And, that is the key difference. For me, it is all about the underlying economic engine. Take DC, for example – after coming not of the recession strong, sequestration kicked-in and they are now struggling through the job erosion and slow-growth brought about by those policies. In contrast, our rapid growth is fueling development across all real estate categories.
What is really critical to understand is that we are not late in the 4th quarter or anywhere near that final 2 minute hurry-up offense. Based on general economic factors for the US and the strength of our local engine (remember 2017 is when Toyota’s and Liberty Mutual open) we still have continued expansion ahead – as such, we are probably in the early to mid-part of the 3rd. That leaves us a lot of game to play. In addition, our multifamily metrics are strong! As you can see below, apartment rents are rising fast – and the average occupancy rate is 95%. Hey, that means our apartment units are running essentially full. And, if that is not enough, fully a third of DFW apartment units report occupancy above 97%. Those are solid metrics, by any standard.
Next week, we will take a closer look at the new single family home sector and assess the potential under-supply shaping DFW market demand today.