AATC and AAGD annually hosted a State of the Industry (SOI) economic forecast lunch on September 18th featuring Jessica Heer, Senior Vice President Talent Attraction, with the Dallas Regional Chamber and Carl Whitaker, Market Analyst, with RealPage.
If you’re thinking, this is the second SOI this year, you would be correct. Historically, the SOI was annually held in January, but given our industry’s budget-cycle, it just makes sense to host this event in the fall. So, look for this event to occur again in September 2019. For you econometric nerds (asset managers, analyst, etc.), you know who you are, that means the presentations will be based on second-quarter numbers, but those should suffice for budget planning purposes.
The big take-away from this event: DFW’s population has exploded, is exploding, and will continue to explode! Heer’s overview included the following: in 1990 DFW had a 3.9 million population and ranked as the 9thlargest metropolitan area in the United States. As of 2018, DFW’s population exceeds 7.4 million and ranks 4thin the nation. If this 30-year trend continues, Heer predicts within fifteen years DFW will surpass Chicago for 3rdplace. According to Heer, DFW is adding 1 million people every seven years or 146,000 people per year or 400 people per day—every day!
DFW is a jobs machine according to Heer. She indicated that job growth is driving population growth. She showed that DFW ranks 1st in the nation in job growth adding 120,000 (3.4% growth rate) form April 2017 to April 2018. She asserted that companies’ value DFW’s overall ability to attract talent and expand labor markets. Economic diversity enables DFW to have stable economic growth and thrive during down turns.
In case you forgot how awesome DFW is, Heer pointed out DFW’s economic output is valued at $512 billion and that along with Houston, Austin, and San Antonio (the Texas Triangle) form a $1.28 trillion economy. She stated that the Texas Triangle (DFW, Houston, San Antonio) economic-output equals the economies of Russia, Canada, and Australia and would rank 15th if it was a country. She added that if Texas was an independent nation, it would have the world’s 11th largest economy.
From Heer’s 50,000-foot regional view, Whitaker brought us down to where we spend our time: rents & occupancy! Thanks Carl!
Whitaker provided an in-depth report on the DFW apartment market. He covered the different property classes, rent changes, occupancy, absorption, and projected new unit inventory.
Whitaker stated that rent growth for the past 8 years (32 quarters for you spreadsheet gurus) average 3.7% He also said that 2ndquarter 2018 new-resident rent growth is at 2.5%.
Nearly one in every five apartments built in the nation are built in Texas according to Whitaker, yet DFW occupancy remains high: 94.6%. In Tarrant County submarkets, Burleson leads with a 97.5% occupancy rate followed by central Arlington (95.8%) and Hurst/Euless/Bedford (95.7%). The overall Tarrant County occupancy rate is 95.1%.
As for rent growth, Whitaker showed Tarrant County submarkets leading DFW: East Fort Worth (5.5%), Burleson (4.6%), and West Fort Worth/Parker County (4.4%). Whitaker foresees continued high occupancies (94.5%) and strong rent growth (4%) in Tarrant County submarkets for 2019.
To see Heer’s and Whitaker’s full presentation, click on the following link:
For more information on any of AATC’s economic information sessions or seminars, contact Perry Pillow at email@example.com or call him at 817-616-0354.