Understanding the state of the real estate market is crucial to success, and we at Jara Capital believe in staying informed to stay ahead. That is why we recently attended the MultifamilyInvestor Conference hosted by Disrupt Equity, a Texas-based real estate investment company.
With over 1000+ attendees including investors, brokers, property managers, and lenders, the
event was a huge success. We learned about the state of the market, market headwinds
investors are currently facing, and risk mitigating strategies to navigate this turbulent market.
Dallas/Fort Worth leads all Texas major metro areas in apartment occupancy, according to
apartmentdata.com with an occupancy rate of 92.2% as of January 2023, surpassing all other major markets such as Houston, Austin, and San Antonio. Over the past year, the DFW metro has also recorded the highest rent growth rate of 6.3% year-over-year, far ahead of second place, Houston, with 4.6% growth. However, it is worth noting that although DFW’s occupancy
rate remains the highest, it has gradually decreased since September 2022 when it was around
93%.
The high apartment occupancy rates in the Dallas/Fort Worth metro area indicate a strong market with solid fundamentals. While Texas has benefited from the pandemic migration boom,
a cooling effect in the second half of 2022 was expected. However, long-term prospects for
investing in Dallas remain optimistic. Over the past year, Dallas led major metros in both
occupancy and rent growth, despite a recent pullback in occupancy due to increased multifamily
supply and a slowing rental market. These factors reinforce Dallas as the primary market for
multifamily investments. As long-term investors, there are exciting opportunities to be found in
the Dallas market, and the positive long-term fundamentals make it an attractive destination for
real estate investors.
The US economy is showing signs of recovery and return to growth according to the latest data by S&P Global. The latest flash PMI data for February shows that the U.S. economy has
stabilized after a challenging start to the year, with the composite output index rising from 55.7
to 57.5. However, the report highlights that inflationary pressures remain strong, with input costs
rising at the fastest rate in over a decade, leading to the sharpest rise in output prices since the
financial crisis. Meanwhile, supply chain disruptions continue to cause problems, with delivery
times lengthening at the second-fastest rate on record. Business confidence is still high, but the
tight labor market and rising wages are seen as potential risks to future growth. Overall, the
report suggests that while the economy is recovering, challenges remain in the form of inflation
and supply chain disruptions.
Investors should pay attention to the latest flash PMI data as it provides valuable insights into the U.S. economy’s overall health. The report indicates that the economy has stabilized, which
is good news for the real estate market. However, rising inflation and supply chain disruptions
may impact future growth and present challenges for investors. Inflationary pressures could lead
to rising interest rates, making borrowing more expensive and potentially reducing the demand
for real estate. Additionally, supply chain disruptions could delay construction and increase
construction costs.
At Jara Capital, We continue to approach investment opportunities with caution, taking into
account the current state of the economy and reevaluating our strategy accordingly.
