Willett says this is the second consecutive year that a relatively flat Q2 has been trailed by an active Q3. Ground is almost always lost in the fourth quarter, but this year is more unpredictable. “As we look into the fourth quarter, it's going to be hard to say what will be the impact of all these forces,” he says, “and what is due to seasonality. It's still a struggle on the single-family side, particularly for that first-time buyer.”

Although Q3 stats are still being finalized, the region's submarkets appear to have benefited already in the wake of more cautious financial markets. Most submarkets have hit or are within reach of 95% occupancy. Richardson's 9,000 units are 96.1% leased; Lewisville's 21,000 apartments are 96% filled. Dallas' Uptown, totaling 13,000 units, has hit 93.6% occupancy; Las Colinas' 23,000 apartments, 94.9%; and West Plano's 27,000 units, 95.7%. Northeast Tarrant County appears to be the leader on the western side of the metroplex, with its 6,600 units at 96.9% occupancy.

Willett says the construction pipeline shows 13,200 apartments will come on line by midyear 2008. Since Q3 2006, there have been 6,100 units razed, mostly 1980s product in good locations and nearly all redevelopment candidates. The fast-paced demolition has put Dallas at the top of the nation's teardown list. “We've certainly never been in that position before,” he says.

The settling down of the single-family market also has brought some improved news on the foreclosure front. George Roddy Sr., president of Dallas-based Foreclosure Listing Service Inc., says foreclosure postings have declined for the second consecutive month. It's too early to label it as a trend although “two months is the longest downturn we've seen,” he says. “The November postings, which come out in mid-October, will be the telltale mark. If we show a third month in most North Texas counties, then that's meaningful.”

Year-to-date numbers are still higher than last year, up 10% to 34,635 postings in the first 10 months of this year from 31,378 for the same period last year. Roddy is predicting postings will hit 40,000 by year's end, the highest mark since roughly 1990.

Roddy stresses foreclosure postings lag economic indicators by three to six months. As a result, the turmoil in the financial markets won't hit the housing sector until the end of the year. With two months of fewer postings under its belt, he says Dallas/Fort Worth could plateau instead of crater when the sector catches up to the upheaval in the financial markets.

Although the precise cause can't be pinpointed, Willett says a portion, but not all, of the multifamily market's uptick can be credited to the single-family sector's breakdown in the 57 US markets that M/PF surveys each quarter. “We're seeing really solid results everywhere,” he concludes.