Hessam Nadji, president and CEO of Marcus & Millichap.
LOS ANGELES—There is good news and many amazing statistical facts—our industry has exploded. So said Hessam Nadji, president and CEO of Marcus & Millichap, during a special keynote luncheon presentation during RealShare Apartments on Thursday.
According to Nadji, the US is adding 2- to 2.5-million jobs per year. “We have a 5% unemployment rate, 1% inflation rate, and 1.7% 10-year treasury yield.” He added that 145 million people are employed in the US, which is 7 million more jobs than in 2006.
In the apartment industry, he says, “we have a national average of 3.5% vacancy rate, which is 120 basis points below 2006.” As for the average monthly rent, Nadji puts it at $1,296, which is about 33.2% above 2006.
His message? “Cheer up America!” From a housing/apartment perspective, it couldn't get any better, he said, adding that “there is no monster.”
Jobs are broad based across the county, explained Nadji. “Dallas and Fort Worth is thriving with job creation and Orlando is back,” he said, adding that “Chicago, Seattle, Atlanta, New York, Boston, Philadelphia and Washington, DC, are also top metros for employment.”
Housing, Nadji explained, isn't hindering to the apartment market. “As an apartment industry, we want the housing market to do well. There is plenty of demand for both.”
Nadji said that “Not to say that something terrible can't happen, but the market is a bit fear oriented. Cycles don't just die of old age. We are a bit further in terms of time, but we are further in terms of growth.”
And there is so much pent up demand on a pure demographic basis, he explained. Should we be worried about new construction? He said that 10 metros account for half of the new apartment supply and those could get overbuilt, noting that in those markets, your pencils have to be extremely sharp. “As an industry, the rest of the country is sharing 151,600 units per year.”
As for what we should worry about? Nadji said renter household income. “The percentage of income that people have to pay for rent is going up. There is a lot of pressure on managing the affordability side.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
