What are some key statistics/indicators to look at that will help point out if it's time to pull out of the subject market? This is in regards to multifamily, any thoughts/feedback appreciated!
Some stats I can think of: total population, historical population growth, homeownership %, supply/construction, vacancies
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I look at population, population growth, job growth, tenure split, affordability for rent/own, vacancy. With that being said, I also heavily look into the master plans of the communities I am considering. The above info will tell you the area, but the master plan will tell you which class areas will change due to influx of capital. Especially important for retail, no one wants a "ghost box".
Rent growth
My firm looks at population growth, job growth, supply pipeline, and projected rent growth as our main indicators. Other indicators we look at: how diversified the economy is, median home prices in the area, how much of a pain in the ass the municipality is to deal with.
My employer stresses jobs/permits
In general you want 2:1 new jobs to total housing permits (including SF) and maybe 4-5:1 jobs to MF permits
All of this info can be had for free at the St. Louis Fed's Economic Data website "FRED"
They even have a macro you can download and update from quarter to quarter like we do for every market you're in or looking at.
That is an awesome way of looking at prospective areas.
What statistic / chart do you type in to find housing permits on Fred?
You have to do it by market. So, type in "Denver housing permits" and you should find both total permits and then a single family permit count for Denver (or whatever market you're looking at).
Then it's just subtraction to come up with the # of MF permits
By the way, we use the not seasonally adjusted job figures in the numerator. They track that number monthly and we just pick up the last twelve months job growth #
delete
For in town stuff, "follow the gays and artists" is my favorite adage. Plotting walk scores vs. rents has always been a useful metric as well (there is Brookings Institute study to back this one up too). I've got a few more, but a lot of this depends a lot on the MSA, submarket, and the micro pocket within the submarket.
rental rates
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