In many recovered housing markets, Americans are now paying more for condominiums than they did during the housing boom, according to the S&P/Case Shiller Home Price Indices. But developers are barely building new condominiums to meet that demand.
Downtown areas can be difficult places to build apartments simply because there is limited land for new construction projects. But in recent years, developers have been highly motivated to overcome the barriers to build downtown.
The percentage of vacant apartments stayed incredibly low in the first quarter, as cold weather delayed a confrontation between growing supply and growing demand. As a result, says Victor Canalog, chief economist and senior vice president for Reis Inc., “The most die-hard multifamily optimists will have their beliefs tested in the next six months.”
Modular construction, in which buildings are created in a factory, transported on the back of a truck to the site and assembled like giant Lego blocks, has become an increasingly common construction method for apartment developers.
Students are opting for the amenities and services offered at new student housing properties, encouraging developers to add more and more amenities and services to their plans. The latest data on pre-leasing for the fall 2015 school year shows that the newest properties are leasing quickly—and at high rents.
With so many new apartments being built across the country, the cities that have had the most new construction over the past five years show how the next wave of new apartments now under construction might be absorbed.
The student housing business faced declining college enrollment in 2014. At the same time, developers finished more purpose-built student housing properties than ever before. But these new student housing communities leased up very quickly anyway.
Thousands of California multifamily properties may soon become more energy efficient, thanks to new plans there to make Property Assessed Clean Energy (PACE) financing available to affordable housing properties.