Neither an upswing in home sales nor a wave of new multifamily construction is affecting apartment vacancy rates so far this year.  Rates are down and rents are strong across the nation.

Apartment markets improved across all areas according to the National Multi Housing Council’s (NMHC) April Quarterly Survey of Apartment Market Conditions. All four indexes — Market Tightness (54), Sales Volume (55), Equity Financing (56) and Debt Financing (59) — came in above 50, which indicates improving conditions. This reverses last January’s findings, where Market Tightness and Sales Volume dipped below 50 for the first time since 2010.

“The apartment industry is operating on cruise control, as the expansion continues unabated,” said Mark Obrinsky, NMHC’s Vice President for Research and Chief Economist. “While concern about overbuilding has begun to crop up, demand for apartment residences remains strong. New construction may have finally recovered fully, but most units under construction won’t be delivered until 2014 or later. The dearth of recent completions has contributed to relatively low product availability. As deliveries increase, we expect to see an even greater pick-up in sales volume.”

Key findings include:

Financing remains constrained. One in ten reported construction financing as available for all types of apartments in all markets. In addition, only one quarter thought acquisition financing was available for all properties in all markets.

Market Tightness Index rose to 54 from 45. The index has been above 50 for 12 of the past 13 quarters, with only January 2013 indicating contraction. One quarter of respondents saw markets as tighter, up from 16 percent last quarter.

The Sales Volume Index increased to 55 from 49. Like the Market Tightness Index, the pickup in the Sales Volume Index showed improving conditions again this quarter. Almost one-third (30 percent) reported sales volume was higher while only 20 percent indicated that sales volume was lower.

The Equity Financing Index remained at 56, unchanged from the previous two quarters. This reflects the 15th quarter in a row with the index above 50. This is the seventh quarter in a row in which the most common response was that equity finance conditions were unchanged from three months ago.

Debt Financing Index increased by two points to 59. One quarter of respondents viewed now as a better time to borrow compared with three months ago, while six percent viewed now as a worse time. This was the ninth consecutive quarter in which the share of respondents who thought debt financing had worsened was in single digits.

• 

• 

• 

• 

• Share/Save

The median price paid for a house in Southern California rose 23.4% from a year earlier, representing a 56-month high in March, according to San Diego-based DataQuick.

The median sales price for the six-county Southland region was $345,000, up 8% from $320,000 in February and up 23.4% from $280,000 one-year prior.

The previous median high was $348,000 in July 2008.

“Price measures continue to rise for two simple reasons,” said John Walsh, DataQuick president. “First, demand for homes has risen at a time when the available supply is unusually low. Prices have had nowhere to go but up in many areas. Second, the gains are especially high right now because of the change in market mix: Sales of lower-cost homes have fallen at the same time activity in the higher price ranges has risen.”

According to a report by DataQuick, sales of mid- to high-end homes shot up this spring as the impact of foreclosures continued to fade. 

Despite a sharp drop in sub-$300,000 deals, total sales were the highest they’ve been in six years for the month of March. 

A total of 20,581 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, DataQuick reported. This marked a 29.1% jump from 15,945 sales in February and a 3.1% increase from 19,953 in March 2012

Avenida Paulista in São Paulo.

When it comes to rising housing prices, no country in the world beats Brazil.

According to Knight Frank’s Global Real Estate Index, released this month, Brazil ranks No. 3 in the world and No. 1 in the Americas for rising home prices. Only ridiculously expensive Hong Kong and Dubai, which are not countries, have seen prices rise more. So in fact, no single country has seen its housing prices rise as much as Brazil.

Brazil housing prices rose 13.7% from the fourth quarter of 2011 to Dec. 31, 2012. By comparison, U.S. housing prices rose 7.3% in the same period, putting it at No. 12 in a list of 55 countries ranked by Knight Frank.

The only other country in the hemisphere to make it into the top 20 was Colombia, with real estate prices rising 8.3% in 2012.

Brazil stands out. And one reason is the low cost of financing. Or at least low by Brazilian standards. Mortgage rates are at least 1.3% a month, and loan payments are generally for just 15 years. It used to be that Brazilians bought homes in cash, but not anymore. They are financing purchases with down payments. Since 2009, when Brazilians starting buying homes on debt, mortgage lending has risen five fold, by 550% between then and 2012.

According to Brazil’s Institute for Economic Research, or FIPE, housing prices rolled into the end of 2012 in seven capital cities on a high note. Prices in all seven cities — from São Paulo to Rio de Janeiro — rose well above the inflation rate of 5%. At the start of the fourth quarter last year, at the end of September, Brazilian housing prices had already risen by 15% while inflation was not even half that.

Looking back at September, FIPE said São Paulo real estate rose 1.5%, three times higher than the national inflation average for the month.

Average price per square foot in São Paulo was R$6,806, or around $3,403. Rio was even worse and has become the most expensive city in Brazil when consider square foot pricing. In Rio, it’s over R$8,300, or around $4,000.

In 2012, average price per square foot in New York City was $1,294.

Despite this, FIPE says there is no real estate bubble in Brazil.

But that all depends on the definition.

By the popular American definition, Brazilian real estate is not in a bubble. Its banks do not trade in risky mortgage backed securities. Housing loans are not packaged up into sophisticated investment products for hedge funds and the bulge bracket banks to play around with. Moreover, downpayments are actually required, unlike in the U.S. where subprime clients were able to get into a house with little or no money down, leading to a foreclosure crisis.  Brazil is not even close to  foreclosure crisis.

Strangely enough, despite the higher prices and red hot demand, many of Brazil’s real estate developers are struggling.

Homebuilder Rossi Residential reported a 2012 loss of R$206 million ($102 million) and PDG Realty did even worse, losing R$2.17 billion ($1 billion) last year.

Rising material and labor costs are some of the reasons for the loss, though a lot of it seems inexplicable.

Even Gafisa (GFA), the only Brazilian homebuilder traded on the NYSE, struggles to stay above $4 a share. The stock is down 25.6% over the last 12 months and a whopping 77% over the last five years, all the while Brazilian housing prices were rising to where they are today: the fastest rising single country home market in the world.

The Hottest Real Estate Markets On Earth