Apartment Market Sets 9-Year High in Third Quarter as Occupancy Rates Push to New Levels

The national apartment market had its strongest summer in nine years and continued its phenomenal 2015, according to early third quarter 2015 numbers from Axiometrics, the leader in apartment market and student housing research and analysis. Research showed:

Average national rent was $1,247 for 3Q15, a $59 increase from the average of $1,186 in 3Q14.

Annual effective rent growth of 5.2% represented a 10-basis-point (bps) increase from the 5.0% reported in 2Q15 and a 109-bps rise from the 4.1% in 3Q14. The rate is the highest since 3Q06, when rent growth was 5.3%.

Rent growth has been 5.0% or above for the first three quarters of 2015, the first time that has happened since 2006.

Quarter-over-quarter effective rent growth of 2.0% was a 29-bps increase over the 1.7% reported in 3Q14 and the first time a third-quarter quarterly figure was 2.0% or higher since 2005.

The second quarter is historically the strongest for quarterly effective rent growth, but the 77-bps quarterly-rate decrease for 3Q15 from 2Q15 was the smallest 3Q-2Q decrease since 2011.

Some 49 metros among Axiometrics' top 50 had positive quarterly effective rent growth, a strong indicator of apartment market strength. Only the Nassau County-Suffolk County submarket (Long Island) in New York recorded a negative quarter-over-quarter rate (-0.2%).

Occupancy set a 14½-year high at 95.3% in 3Q15. That rate represented a 5-bps increase from 2Q15 and an 18-bps increase from the 95.1% of 3Q14. It was also the highest since the 95.7% occupancy of the first quarter of 2001.

"This has so far been the strongest year for the apartment market since the end of the Great Recession, and these quarterly figures are additional confirmation of that," said Stephanie McCleskey, vice president of research for Axiometrics. "This year has also shown more widespread strength nationwide. Metropolitan areas in the Northeast and Midwest that were down a year ago are resurgent, and the West, South and most of Texas remain strong. Job growth is better in all regions, and single-family home prices keep rising."

Portland New No. 1 for Rent Growth

While the Western United States still has the most robust apartment markets, the Portland, OR metro area had the highest annual effective rent growth in the third quarter among Axiometrics' top 50 markets, based on number of units.

Oakland, which had been No. 1 for the past year, fell to No. 2 though the Bay Area still placed all three of its major metros in the top five. San Francisco was No. 3 and San Jose No. 5. California placed seven metros in the top 25, and Florida placed five, including Jacksonville, which was new to the top 25.*


QAP Updates Across the Nation

Arizona Announces $2M HOFA for State Housing Fund, HOME program

The Arizona Department of Housing is announcing a NOFA of approximately $2 million for funding through the State Housing Fund, HOME program for housing rehabilitation programs for Owner Occupied single family dwellings.

California Issues NOFA for 2015 Drought Housing Relocation Assistance Program

CDHCD announces the availability of approximately $1 million in funding for the 2015 Drought Housing Relocation Assistance Program (DHRA). In response to the Governor’s declaration of a drought state of emergency via Executive Order B-29, dated April 1, 2015, HCD is providing temporary assistance for persons moving from their current residence, if it lacks reasonable access to potable water resulting from the drought. Eligible Providers in counties where a Sponsor has not been identified, may apply to become Providers of the DHRA program per the DHRA Guidelines. Please see the HCD Website for program information:  California Department of Housing and Community Development (HCD)

California Updates Affordable Housing and Sustainable Communities Program

AHSC staff released proposed changes to the 2015-16 Strategic Growth Council AHSC Program Guidelines. Proposed revisions cover a range of topics including: revised scoring criteria, the jurisdictional cap for localities, projects in rural areas, transportation capital improvements, housing and transportation collaboration, urban greening and green infrastructure, active transportation, and community benefits and engagement. SGC will be holding several public workshops to describe proposed changes in the Draft Guidelines and hear public comments on the Draft Guidelines. Written comments may be sent to:  no later than Friday, October 30, 2015 in order to be considered for the draft Final Guidelines document. The document will undergo public review, feedback, and staff revision prior to Council adoption of the final 2015-16 AHSC Guidelines at its December 17, 2015 meeting.

The Strategic Growth Council’s Affordable Housing and Sustainable Communities Program funds land-use, housing, transportation, and land preservation projects to support infill and compact development that reduces greenhouse gas (“GHG”) emissions.

Florida Hosts Workshop for Preservation Applications

Florida Housing will hold a Preservation Request for Applications (RFA) workshop on October 7, 2015, beginning at 2:00 p.m., Eastern Time.

The workshop will be held to solicit comments and suggestions from interested persons relative to Florida Housing’s proposed Request for Applications (RFA) 2015-111 offering an estimated $5,901,631 of Housing Credit financing for the Preservation of existing affordable multifamily housing developments.

The workshop will be available by telephone or interested parties may attend in person at Florida Housing’s offices located at 227 N. Bronough Street, 6th Floor Seltzer Room, Tallahassee, Florida. The call-in information is available at

The agenda for the workshop and a draft of the proposed Preservation RFA will be posted to the website prior to the workshop. A Web Board notice will be issued when this information is available.

Iowa Hosts Mandatory Housing Tax Credit Developer Training

The Iowa Finance Authority is hosting a Mandatory Housing Tax Credit Developer Training on Monday, October 19. Attendance is mandatory for developers planning to submit an application for 2016 Housing Tax Credits. The project developer or developer’s representative must attend the training. The training will be held at DMACC Southridge Center, 1111 E Army Post Rd, Des Moines, IA 50315. IFA is also offering an optional on-line application training.

Louisiana Housing Corporation Board Appoints Interim Executive Director

The LHC Board of Directors appointed Chief Administrative Officer Michelle L. Thomas to the position of Interim Executive Director for the Corporation. Ms. Thomas has served in the capacity of Chief Administrative Officer since 2014.  Thomas, a graduate of the University of North Carolina at Chapel Hill, has more than 20 years of experience in change management, strategic planning, organizational development and operations management.  She has held executive and management level positions in both the public and private sectors including local government, higher education, public housing and federal government contracting.

Maryland Issues Application Guidance Related to Changes to Enterprise Green Communities

Maryland DHCD intends to announce awards for the Fall 2015 LIHTC Competitive Funding Round in December 2015. Enterprise Green Communities has notified the Department that they recently made changes to their certification criteria (2015 Criteria).  Projects applying in the Fall 2015 Funding Round may choose to certify under the 2011 Criteria or the 2015 Criteria.  Projects that intend to use the 2011 Criteria for Green Communities Certification must submit their Prebuild Certification application to Enterprise no later than October 7, 2016. Please contact Enterprise Green Communities with any questions regarding the 2011 Criteria, the 2015 Criteria or other program requirements at

Ohio Releases 2016-17 Competitive Scoring Summary, Review Tools

The 2016-2017 Competitive Scoring Summary and Competitive Review Tools are now available on the 2016-2017 QAP page. The 2016-2017 AHFA (Excel application) will be available soon. A new Policy Map Scoring Tool has also been developed to assist our development partners in planning for proposal applications. Applicants can enter addresses of potential sites or adjacent sites and add scoring data layers by county and census tract. Please note that the Policy Map Tool works best in Firefox or Google Chrome. It does not work in Internet Explorer 9.

TAAHP Hosts Event to Review Texas 2015-16 QAP

TAAHP will present its consensus comments to the Qualified Allocation Plan (QAP), the Multifamily Rules, the Real Estate Management Rules, and the Underwriting Guidelines at the upcoming October 14, 2015 Executive Management Series.  The event will take place on October 14 at 11:00 a.m. at St. David’s Episcopal Church, Crail Hall C, 301 E. 8th Street, Austin, Texas 78701. Register here. **


Mortgage Rates Fall to 4-Month Low

Mortgage rates moved lower this week, with the benchmark 30-year fixed mortgage retreating to 4.00 percent, the lowest level since late May according to's weekly national survey. The 30-year fixed mortgage has an average of 0.26 discount and origination points.

The larger jumbo 30-year fixed rate dropped to 3.89 percent, staying well below the smaller conforming 30-year fixed mortgage. The average 15-year fixed mortgage fell to 3.18 percent. Adjustable mortgage rates were on the downswing also, with the 5-year ARM sliding to 3.19 percent and the 7-year ARM sinking to 3.38 percent.  

Mortgage rates were the beneficiaries of increased jitters about the health of the global economy following the Federal Open Market Committee's latest meeting. When the Fed opted not to initiate interest rate hikes, citing international concerns, it sparked nervousness in financial markets. Nervous investors typically flock to safe-haven U.S. government bonds, to which mortgage rates are closely related. Until this uneasiness is put to rest, don't expect any sharp upward moves in mortgage rates.  

At the current average 30-year fixed mortgage rate of 4.00 percent, the monthly payment on a $200,000 loan is $954.83.  


30-year fixed: 4.00% -- down from 4.06% last week (avg. points: 0.26)
15-year fixed: 3.18% -- down from 3.25% last week (avg. points: 0.14)
5/1 ARM: 3.19% -- down from 3.28% last week (avg. points: 0.20)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in 10 top markets.

For a full analysis of this week's move in mortgage rates, go to

The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The majority of panelists – 60 percent -- expect mortgage rates to remain more or less unchanged over the next week, and 30 percent forecast mortgage rates will decline. Just 10 percent of respondents predict that mortgage rates will rise in the next seven days.*


Developers Take Stealth Route Into Senior Living

Senior housing remains one of the most booming real estate sectors, and with a huge wave of baby boomers set to enter retirement in the coming years, untested real estate developers are jumping into the industry.

Because operating senior living communities with health care services comes with a lot of responsibility, risk and high cost, some developers are coming into the field by way of age-restricted housing communities meant for adults aged 55 and older. Age-restricted communities, also known as 55+ communities, offer big opportunities at a lower cost and risk to developers looking to get their foot in the door of this attractive market.

Not only does this housing option fill a growing need for more affordable options for seniors, operating these communities could open up long-term opportunities for developers that may already be established in multi-family housing and are eyeing the senior living space. Established senior living providers should be aware there’s more than meets the eye to some of these new developments, as today’s age-restricted specialists could be tomorrow’s senior living competitors.

Independent living alternative 

Part of the reason more developers are starting to build 55+ communities is due to the appealing demographics of the sector and strong performance over the last several years.

“With 10,000 people turning 65 every day, [developers] are looking at those numbers and it looks like an attractive time to get into the market,” says Jason Childers, formerly a senior vice president with Leisure Care and co-founder of 2Ten Consulting, who has 14 years of experience working with developers in senior housing. “The other way of looking at it is over the last several years, senior housing has had relatively strong performance against some of the other real estate categories.”

Developers are already aggressively building in senior housing, and Childers expects that growth to continue.

Construction in seniors housing was up 4.2% in the second quarter of 2015, beating other real estate sectors, according to research from NREI and the National Investment Center for Seniors Housing & Care (NIC). Developments are also expected to grow, as 69% of survey respondents said they anticipate more construction starts over the next 12 months.

The 55+ housing market is a good opportunity to serve a population of baby boomers who may not be looking for assisted living, says Cecil Rinker, a 17-year senior housing veteran who now is senior consultant with Old Pueblo Placement Services, a senior living advisory and placement services company. Instead, these boomers may be interested in a community without a huge entrance fee or and without the need to pay for services they don’t need and don’t want.

Age-restricted communities could potentially fill an affordability gap in the market. According to Rinker, the difference between age-restricted housing and multi-family developments is easy to overcome because 55+ communities do not have to offer additional services or increase prices.

“Senior housing has been catering to the top 2% of baby boomers,” Rinker told SHN. “The 55+ market is helping an underserved population. This is truly independent living for people who don’t need services or want services. That’s why multifamily housing [development] is coming in—the jump is easier. They don’t have the hang-ups for trying to do these services.”

Childers agrees that as an affordable option, age-restricted communities can be attractive to baby boomers, and developers have the opportunity to create an exciting, new product that will appeal to a huge number of seniors in the years ahead.

“Where these developers will really be successful is if they can foster a sense of community,” says Childers. “Even if they are not providing all the services, if they can foster a sense of community among the residents, it creates a nice, affordable product for a lot of seniors who may not be able to handle the cost of an independent living community.”

Much ado about a kitchen 

With a huge influx of retirees about to hit the market, there are also big opportunities as populations in 55+ communities age. New developers entering age-restricted housing that are looking to build new communities would do well to think about how these properties can be converted in the long run.

“If [developers] are starting to think long term, they should develop these communities with the mind that they can be easily converted in the future,” says Rinker. “If developers are going to hold these communities, then they need to convert them into traditional senior living. They are much more attractive to sell also if they are easily convertible. We can build for this 55+ model now, but I think the real winners will be thinking forward enough into the future to build their models with all the pieces of the puzzle to create assisted living later.”

Childers adds that one of the key areas developers should think about is constructing kitchen spaces that can easily be converted for independent living and assisted living communities. Cutting out some of the steps for rebuilding in the future can make age-restricted housing communities much more attractive to buyers and operators later.

“The other area of opportunity is having a commercial kitchen,” says Childers. “For developers who want to start looking at adding services down the road or potentially selling their building to someone that would operate assisted living, making sure they add the space for a commercial kitchen will make the building a lot easier to convert.”

So while the immediate mark for developers eyeing the senior living sector may be age-restricted housing, convertibles could be a natural next step into an area with growing demand.***



Events (2015)

  • Gill Group plans to attend the National Association of Housing and Redevelopment Officials’ (NAHRO) 2015 National Conference & Exhibition October 15th – 17th in Los Angeles, CA.
  • Gill Group plans to attend the 2015 Tennessee Governor’s Housing Conference October 7th – 8th in Nashville, TN.
  • Cash Gill attended the Missouri Real Estate Appraisers Commission Quarterly Commission Meeting September 29th – 30th in Jefferson City, MO.
  • Gill Group attended the CARH Quarterly Board Meeting September 15th – 16th in Washington, DC.
  • Cash Gill attended the Missouri Real Estate Appraisers Commission Quarterly Commission Meeting June 17th – 18th in Jefferson City, MO.
  • Gill Group attended the National Council for Affordable Rural Housing’s Annual Meeting June 14th – 16th in Washington, DC.
  • Gill Group attended the National Council of State Housing Agencies’ (NCSHA) Housing Credit Connect June 1st – 4th in Los Angeles, CA.
    • Cash Gill spoke on a panel entitled “Successful Development in Challenging Markets”
  • Gill Group attended the Middle Atlantic Regional Council of the National Association of Housing and Redevelopment Officials’ (MARC NAHRO) Spring Conference May 19th – 22nd in Ocean Springs, MD.
  • Gill Group attended the Tennessee Association of Housing and Redevelopment Authorities’ (TAHRA) Spring Workshop April 20th – 22nd in Murfreesboro, TN.
    • Cash Gill presented a session Tuesday, April 21st entitled “Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies for RAD and LIHTC Transactions”
  • Cash Gill attended the Missouri Real Estate Appraisers Commission Quarterly Commission Meeting April 15th – 16th in Jefferson City, MO.
  • Gill Group attended Bank of Advance’s Annual Meeting March 19th – 22nd in Norfork, AR.
  • Gill Group attended the Maco Companies’ Annual Meeting March 12th – 15th in Biloxi, MS.
  • Gill Group attended the Council for Affordable Rural Housing’s Quarterly Board Meeting March 4th – 5th in Washington, DC.
  • Gill Group attended Mississippi’s Annual Affordable Housing Conference February 23rd – 25th in Natchez, MS.
  • Gill Group attended NH&RA’s Annual Meeting February 18th – 20th in Key Largo, FL.
  • Gill Group attended CARH’s Midyear Meeting January 27th – 29th in St. Pete Beach, FL.
    • Cash Gill spoke on a panel Wednesday, January 28th entitled “Preservation Challenges and Opportunities”

Events (2014)

  • Gill Group attended 40+ meetings and conferences throughout the United States in 2014.

GROWTH (2014 - Highlights):

  • Gill Group began the process of working with owners of affordable housing to develop a web-based program that will work hand-in-hand with our services. It will give the users of our appraisals, market studies, capital needs assessments and many other services easy access and real time usage.
  • Gill Group added 2 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are 11 architects, one MAI appraiser, one general certified appraiser, four market analysts and 12 additional support staff. 

Events (2013)

  • Gill Group attended 22 conferences and meetings throughout the United States in 2013

GROWTH (2013 - Highlights):

  • Gill Group expanded our cutting-edge market analysis software and added our own in-house developed needs assessment software for CNAs, PNAs, PCNAs, PCAs, RPCAs, and every other acronym for this type of service. 
  • Gill Group added 4 offices with appraisers, market analysts, engineers and architects.
    • Within the offices are three architects, one MAI appraiser, two general certified appraisers, five market analysts and 10 additional support staff. 
  • Gill Group expanded the footprint of its subsidiary, National Title & Escrow, to cover the entire United States with a local presence.

Events (2012)

  • Gill Group attended 20 conferences and meetings throughout the United States in 2012

GROWTH (2012 - Highlights):

  • Gill Group developed cutting-edge market analysis software that will allow us to do preliminary analysis that is subject-specific in any market in the United States within minutes. 
  • Gill Group added 11 offices with appraisers, market analysts, engineers and architects.
    • The offices now employ an additional 34 people.
  • Gill Group expanded coverage of its subsidiary, National Title & Escrow, to cover the entire United States.
  • Gill Group expanded coverage of its subsidiary, Gill Insurance Group, to cover the entire United States.

  Gill Group has published the following:

  • New York Real Estate Journal - How can low-income housing facilities translate into high profits?
  • New York Real Estate Journal - Up, up and away: Home mortgage interest rates and gasoline prices continue ascending.
  • Tax Credit Advisor - Boston MSA Market Snapshot
  • Tax Credit Advisor - Seattle MSA Market Snapshot
  • Northeast Industrial Development Resource Guide - What Appraisers Know About Investing.
  • Affordable Housing Finance – Urban and Rural Market Studies.
  • Tax Credit Advisor – LIHTC Appraisals 101

Cash Gill, MAI has had the opportunity to speak on the following topics:

  • (Indianapolis, IN) National Council of Affordable Housing Market Analysts - Maximize Your Market: Understanding the Methodology Behind Market Studies.
  • (Reno, NV) Nevada Council of Affordable and Rural Housing - Don't Get Caught in the Red. New Guidelines for Audits and Inspections.
  • (Washington, DC) The Institute for Professional and Executive Development - Nonrecourse HUD Deals - So You Closed Your Nonrecourse HUD Deal. Now What? And Is It Really Nonrecourse?
  • (Arlington, VA) Council for Affordable and Rural Housing - Property Valuation: The Correct Way to Value Properties.
  • (New Orleans, LA) National Council of Affordable Housing Market Analysts - Affordable Housing Site Analysis
  • (Las Vegas, NV) Nevada Council of Affordable and Rural Housing - Auditing and Accounting Guidelines for Section 42 Low Income Housing Tax Credits.
  • (Washington, DC) Council for Affordable and Rural Housing - Rural Development Appraisals and Market Studies
  • (Miami, FL) Council for Affordable and Rural Housing - The Equity Market - Impact on Rural Housing
  • (Washington, DC) Council for Affordable and Rural Housing - How to Foster Affordable Green and Rural Housing Needs Assessments
  • (Indianapolis, IN) Affordable Housing Association of Indiana - Market Analysis – Best Ways Use Market Studies to Ensure Application Points
  • (Portland, ME) Enterprise Buyer/Seller Conference for RRH 515 Properties – Valuing the Product. What Is My Development Worth?
  • (Washington, DC) National Housing and Rehabilitation Association – Financing and Underwriting Special Needs Housing.
  • (Atlanta, GA) National Council of State Housing Agencies – Comprehensive Market Analysis.
  • (Chicago, IL) AHF Live – Strategies for Rural Deals.
  • (Dallas, TX) Crittenden Multifamily – Financing Special Use Properties.
  • (Washington, DC) Council for Affordable Rural Housing – Rural Housing Preservation
  • (Denver, CO) National Council of State Housing Agencies – Rural Housing Strategies
  • (Denver, CO) National Council of State Housing Agencies – Y15: Preservation and Disposition Seminar
  • (San Antonio, TX) Rural Rental Housing Association – LIHTC Legislative Update
  • (Key Largo, FL) Council for Affordable Rural Housing – How National Appraisal Practices Impact USDA Assisted Properties
  • (San Francisco, CA) National Council of State Housing Agencies – Changes and Challenges in Rural Housing Development
  • (Chicago, IL) AHF Live – Preservation of Older LIHTC Deals
  • (Franklin, TN) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Columbus, OH) Council for Rural Housing & Development of Ohio – Rural Housing Market Research
  •  (South Bend, IN) Great Lakes Capital Fund’s University of Affordable Housing – Valuation Risks Using Financing for RAD Deals
  • (Chicago, IL) National Council of State Housing Agencies – Rural Development Opportunities
  • (Orlando, FL) National Association of Housing and Redevelopment Officials – Affordable Housing Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies
  • (Alexandria, LA) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Ft. Lauderdale, FL) Southeastern Affordable Housing Management Association (SAHMA) – Rent Comparability Studies 101
  • (Indianapolis, IN) Midwest Buyer/Seller Conference – CNAs and Appraisals
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities
  • (St. Pete Beach, FL) CARH – Preservation Challenges and Opportunities
  • (Nashville, TN) TAHRA – Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies for LIHTC and RAD Transactions
  • (Los Angeles, CA) NCSHA – Successful Development in Challenging Markets



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