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‘What Renters Want’ with Jessica Fiur: Apartments with Secrets

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Feb 212012

When I was younger—probably due to the influence of too many Nancy Drew mysteries—I was convinced there was a secret  passage in my bedroom. Of course, I was living in a relatively new raised ranch-style house, and my room was on the second floor, sharing one wall with my little brother’s room and another with my parents’ master bedroom (I can’t even begin to tell you how much I enjoyed that when I was a teenager). Obviously, there was not even a possibility of a secret passage. But that didn’t stop me from knocking on all the walls to hear if any area sounded hollow, indicating a secret room, or looking to see if there were any rectangular-shaped indents on the floor, indicating a trap door.

Maybe I should have just played outside more.

Anyway, I’ve long since given up on finding a secret passage. I haven’t even tried pulling on the light fixtures in my current apartment to see if a hidden door would swing open. That would just be stupid, right?

Well apparently, not necessarily. According to a recent article in The New York Times, there are several apartments in New York City with secret compartments, passageways and closets. They’re relics of Prohibition—where people needed secret places to stash their booze—or the result of a quirky developer, or left over from when some murderer killed an old man and buried him under the floorboards and was ultimately driven insane by the beating of that infernal heart!

Right. Well, anyway, while not a “must have” of renters, how cool would it be if one of your apartments had something like that? It would certainly make your apartment stand out in a sea of stainless steel, breakfast bars and on-site parking.

Does your apartment feature any “mysteries” or quirky aspects, or have you ever come across any? Would you be more inclined to rent an apartment if it featured something different like a hidden compartment? And did you ever look for—or find—secret rooms when you were little?

-Jessica Fiur, News Editor

Posted by JFiur at 9:51 am Tagged with: , ,

‘Gimme Shelter’ with Daniel Gehman: Reading the Tea Leaves on Rent Increase Rates

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Feb 172012

No, I’m not an official analyst, of course—just someone who’s been in the business for a while and tries to stay in tune with trends and understand them as much as possible. I was intrigued by news in my local paper (Orange County Register), I’ve now seen for a couple weeks running, about how much apartment rents have been increasing, and for what types of units.

The data I saw showed that two bedroom apartments were increasing at the fastest pace, followed by studio units at a close second. Lagging the pack by a 2 percent delta were one-bedroom dwellings. (Three bedrooms were tucked in there behind studios, but there are really so few of them that I consider them to be an outlier and not really part of this argument. Besides, it’s a data point that messes with my theory!) All this is good news for landlords, of course, but what might it tell us culturally?

Here’s my spin: As the economy has managed to hang on through our last summer of discontent and a reasonable year-end, the general confidence level has begun to creep up, especially as unemployment has begun to inch downward. With more folks feeling better about the reliability of their jobs, they have mustered the will to “un-couple” from whomever they teamed up with to distribute living expenses. In short, of those who can now dump their roommate, many are choosing to do so. Seeing the early manifestation of this trend, landlords have encouraged the move by gently boosting the rents on the two-bedroom units first, encouraging the early un-couplers to get over the hump and move out already—preferably to another apartment in the same community.) What’s it worth to lose a roommate after two or three years? Fifty bucks? A hundred? Anyway, I believe this is why two-bedroom rents have been rising the fastest.

To where do these newly independent souls move? Well, to studios in many cases, because the rent there is still less than a one-bedroom. Consequently, the rents on studios have been notched up in response to this increased demand. The one bedroom rents have increased as their boat is lifted by the rising tide.

So there you have it—my two cents’ worth on what I see happening in local apartment communities. All of this is very, very good for the multi-family rental business, for which I am very grateful.

Posted by JFiur at 9:12 am Tagged with:

Guest Blog: Insights from a Young and Leery New York Renter, Part 1 On Unit Maintenance

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Feb 152012

Part 1 – On Unit Maintenance

Due to less than fortunate experiences, I have dealt with almost every aspect of a real estate company that a renter can expect to encounter in the last two months. My issues began when the bedroom wall in our 100-plus-year-old building slowly began to rot from a leaking steam riser. (Don’t worry; this is not your standard ‘gripping renter’ blog post. The end outcome was positive, and I think I learned some tips that can help companies avoid the dreaded one star Yelp review.)

I worked from home one day while the maintenance crew decided what should be done, eventually opening two holes in the wall, and ‘fixing’ the pipe. The inside of the wall was covered in a thick coat of mold, and I requested that it be sealed immediately. I was planning to move in July, and did not want to deal with an invasive wall replacement. This repair would have been fine, but the fixed pipe hissed even louder when the heat turned back on, and the crew never returned to paint my wall. Important point number one.

  • Leave no trace. When work is done, I want my home to look the same as it did when you arrived. This includes smells as well. Cigarettes linger for quite some time even if you step outside.

Two weeks went by and I receive a call at 5:30pm on a weekday informing me that the unit below me had a bad leak, and that management needed immediate access to the apartment. I rushed home with the vision of my cat in a pirate hat floating on the ottoman. There was nothing out of the ordinary, just a hissing steam pipe in the wall as usual.

I let management in to inspect for the cause of the leak. I was told it was coming from a spot in my shower that was missing a half inch of grout. I said that I thought it was unlikely unless there was a crack in the shower pan, but I like fresh grout and caulk so whatever floats your boat. I told the super about the leaking steam pipe. I was told that it is normal for radiators to hiss. (There is no radiator on or near the wall where the pipe is, and the wall is warm to the touch.) This brings up another important point.

  • Listen to the renter. She/he is living in the apartment, dealing with the issue every day. We can probably offer some insight into what is going on.

A few days later another letter appeared tucked into my door requesting access because the renter downstairs was having a leak. I decide to knock on her door. She let me in, and I ask to see where her leak is. The entire ceiling of her kitchen (under my bedroom wall where the steam riser is located) was damp, moldy, sunk, split open and leaking. At this point I realized that she was going through the worst of our shared problem. I apologized, took some photos, and informed her that this was a major problem that was going to require a major repair.

The head super told me that the bedroom wall and steam riser needed to be replaced. I informed them that my fiancé and I refused to inhabit an apartment during the process of removing the innards of a mold covered wall, and would like to break out lease and move. I was told this would not be possible, and I could temporarily move my things into another unit.

I then informed then that the repair would violate my warranty of habitability as defined by New York Real Property Article 7 – § 235-B, which was grounds for breaking the lease. This brings up another point.

  • Young renters are web-savvy, and can quickly learn their rights without much legal experience.

I was promptly allowed to break my lease with a pro-rated rent for the month of February with guaranteed return on my deposit. The girl downstairs was also allowed to break her lease. There are now two vacant apartments and extensive repairs required—I like to think this could have been avoided if they just listened a bit better.

This leads us into the second escapade on my tale—finding a new apartment in a market with a 2.4 percent vacancy in a week and a half.

-Mike Ratliff, Associate Editor

Posted by JFiur at 8:31 am Tagged with:

‘What Renters Want’ with Jessica Fiur: Spreading the Love to Your Residents on Valentine’s Day

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Feb 132012

It’s Valentine’s Day again. And—like Halloween—whether you look forward to it every year, or not, at least you get candy, am I right? Anyway, there are many things you can do to show your residents some love on this day (and, no, I’m not sorry for the pun. If ever there was a day to be cheesy, it’s Valentine’s Day).

Have candy at the front desk. Cheap way to buy your residents’ affection? Sure. Effective? Definitely. Just don’t put out a bowl of those “classic” conversation hearts—not only is it a little “germy” to reach into a bowl for unwrapped candy that other people’s hands have touched, no one likes those. Seriously, they taste like chalk. Get fun-sized, wrapped chocolate bars, and see how quickly they disappear.

Put Valentine’s Day cards in their mailboxes or under their doors. It might seem like a pain, but you don’t have to write a personalized message or anything. Just have cards that say you choo-choo-choose them, and sign your name, or stamp the name of the management company. You already do it at the end of the year anyway (and, trust me, all residents know you’re doing it for a holiday tip. You’re not fooling anyone), and it’ll make people happy.

Have a building mixer. A great chance to get your residents to mix and mingle. Plus, maybe you’ll pull out your inner Yenta and make a match. (Practice saying with me, “Have you met Michael in 3B? He’s a doctor!”)

Host a movie night in a lounge. Sure, you can host a romantic comedy-athon (though, really, how much Katherine Heigl can one person stand?). But you can also go the opposite way and host a slasher movie fest. After all, not everyone is feeling romantic on Valentine’s day, and who wouldn’t want to see Jason terrorize a group of canoodling teens?

Offer a list of local babysitters, or arrange for a daycare room for the night. The adults will thank you.

Any other Valentine’s Day suggestions?

-Jessica Fiur, News Editor

Posted by JFiur at 2:36 pm Tagged with:

‘What Renters Want’ with Jessica Fiur: The 9 Best Apartments on TV

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Feb 082012

Finding a new apartment is stressful. And you always have to make concessions—maybe you give up space for convenience, or you take a walk-up for because it’s less money. But you know what isn’t stressful? Watching TV. And television is filled with awesome—though, admittedly, not always realistic—apartments.

Let’s take a look at the 9 best apartments on TV.

Monica and Rachel’s apartment on Friends. This beautiful Manhattan apartment was above the coffee shop where Rachel worked and all their friends hung out, and was across the hall from some of their best friends. And it was a two bedroom. Bonus, the walls were purple! Of course, this apartment was not without controversy. After all, how could two 20 somethings, one a struggling chef, the other a waitress, afford such prime real estate? (Actually, the show answered this at one point. It was Monica’s grandmother’s apartment, and it was rent controlled.)

Jerry’s apartment on Seinfeld. Again, a beautiful, big, apartment in Manhattan. (Apparently TV writers in the ’90s had some major misconceptions about living in New York.) A pretty nice space, with a decent (for New York) size kitchen. Though neighbors like that certainly make the case for having a good chain lock, yadda, yadda, yadda.

Lucy and Ricky’s apartment on I Love Lucy. It had a dine-in kitchen (how is that even possible in New York City?). The landlords—who were also close, personal friends—lived in the building. And it was big enough for plenty of zany hijinks. Plus, the bedroom was large enough for two twin beds. What more could a married couple want?

Carrie’s apartment on Sex and the City. Though her apartment with Big in the movie was much more impressive (that closet is quite possibly the second best closet in all of pop-culture history, second only to Cher’s closet in Clueless), the TV show apartment definitely left an impression, and was a pretty realistic interpretation of a New York apartment—mice, landlord disputes and all (and, yes, as with the Friends apartment, some people also argued that a newspaper columnist could not afford that apartment, but she was also a best-selling author, so I think that’s fair).

Lily and Marshall’s apartment on How I Met Your Mother. They spent all their money buying a New York apartment in Dowisetrepla (down wind of the sewage treatment plant—don’t you know everything is abbreviated in NYC?), and then the floors were slanted. It’s nice to see characters on TV move in to an apartment that isn’t ideal, and it also shows how important doing your homework is before signing that lease.

Jack, Janet and Chrissy’s apartment on Three’s Company. How could you not love a place where the residents implore you to “come and knock on [their] door,” because “[they've] been waiting for you”? And this California apartment was right by the beach! Of course, there was the slight problem of the intruding landlord who was just a little too concerned with who one of the residents was dating. Isn’t that just always the case?

Dexter’s apartment on Dexter. It’s in a great location—right by the harbor in Miami. It’s big enough for his son to have his own room (because he also bought the apartment next door), and for his sister to stay over when she’s in between apartments. And the neighbors mind their own business. Plus there are plenty of air conditioner vents—perfect for a balmy Florida night, or for hiding slides of blood from people he’s ritualistically murdered.

Max and Caroline’s apartment on 2 Broke Girls. Probably the most realistic of the lot of them—two waitresses share a one-bedroom apartment in Brooklyn. The quarters are cramped, and Caroline has to sleep on a Murphy Bed. But, it’s not without its charms. The place is conveniently located near their work. And the backyard is apparently big enough to fit a horse. Yup, realistic.

Pee-wee’s playhouse on Pee-wee’s Playhouse. I know, I know, it’s not technically an apartment. But it had a Chair. That. Talked. How could it not be included in this blog? (“Blog”? That’s the secret word! Aaaaaaaaaaahhhhhhhhhh!)

Did I miss any of your favorite TV apartments? List them below!

-Jessica Fiur

Posted by JFiur at 10:35 am Tagged with: , , ,

‘What Renters Want’ with Jessica Fiur: Top 10 Things You’ll Never Hear a Renter Say

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Feb 022012

In honor of David Letterman’s 30 years in late night, here is a Top 10 list of things you’ll never hear a renter say:

10. “I’d love an avocado refrigerator.” Today’s renters want a modern kitchen with stainless steel appliances. No one wants to live in an apartment that hasn’t been updated since the ’70s.

9. “No rush changing my lightbulb; I know you have more pressing matters to attend to.” No matter how minor a resident’s request is to you, to him it’s the most important thing in the world. Don’t be vague about when something will be fixed; give a specific time so that he can be around if necessary, and if that time has to be changed, tell the resident beforehand, not an hour after the time you quoted.

8. “The broken tile in the lobby makes for a fun obstacle course!” Not only could this scare away potential new renters, but it presents a real safety issue for your current residents. Always make sure your lobby and common areas are well maintained.

7. “My upstairs neighbor’s tapping is helping me learn Morse Code.” A noisy neighbor can make even the mildest Bruce Banner turn into the Hulk. Don’t just ignore the problem. If you’re planning a new building, aim for apartments to be as sound-proof as possible. If you require carpeting over a certain percentage of an apartment to muffle noise, give residents warnings if they don’t. And if you get a lot of complaints about certain people, talk to them about it. 

6. “Cold showers build character, and are a refreshing way to start the day.” Something as simple as a broken water heater can cause you to lose residents faster than, say, someone jumping out of a cold shower. Keep an eye on this, and the first sign of a complaint, fix it.

5. “It’s cool that there’s a line for the treadmill. I just came down to watch, anyway.” It’s all well and good if you want to add “luxury” elements, such as a gym, to your building to enhance the appeal. But one treadmill and a set of weights does not a gym make (actually, that’s more like a prison yard). Take into consideration the projected demand before you add something like a gym and figure out how much equipment to buy. If there’s a gym already but always a crowd, implement rules such as “only 30 minutes to a machine during peak hours.”

4. “Paying by check is easy—and fun!” OK, paying rent will never be fun, but it can be made easier for people. Let people pay their rent online. It’s greener, anyway, plus then you literally can never hear someone say, “the check’s in the mail.”

3. ”It wasn’t until that fifth Chinese food menu under my door that I realized I was craving beef lo mein.” Make sure your building is secure, of course for safety reasons, but also so solicitors won’t bother your residents.

2. “I named that one Mickey.” Rodents and cockroaches are never, never welcome. Spray often, and take care of this quickly. Not just because it’s disgusting, but once one apartment has them, it can easily spread to the next.

1. “I know you’re a business, so it’s cool that you’re raising my rent.” Sorry, you’re on your own for that one.

-Jessica Fiur, News Editor

 

Posted by JFiur at 1:22 pm Tagged with: , ,

‘Gimme Shelter’ with Daniel Gehman: Solar Decathlon Heads West

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Jan 302012

I did a double take when I picked up my local newspaper last Saturday and saw a headline and thumbnail image proclaiming the Solar Decathlon was going to have a change of venue, from the nation’s capital to “the OC.” “Not that Solar Decathlon,” I thought, but there, in the picture, was a glimpse of the Sci-Arc/Cal Tech house from last year’s event, standing out because of its overstuffed and tufted exterior that really gives it the flavor of a hip piece of lounge furniture. So I read on to find that former Irvine Mayor Beth Krom, who is now chair of the Great Park Board, evidently lobbied the organizers to move the event to southern California, after it was initially suggested by Professor Fred Smoller of Brandman University. This, when you think about it, makes all the sense in the world.

Twice I have attended the Solar Decathlon in Washington, D.C. Both times it rained. A lot. On the first visit, it poured and the temperature was in the 40s—making waiting in line to tour the houses especially brutal. At least at last fall’s event, it was warm outside so the rain was more of a nuisance than what felt like a possibly health-threatening event. Despite the interlocking vinyl “walk pads” that had been laid on the ground to absorb the impact of the masses, the grounds turned into a mud pie. For 2011, the event had already been moved off the national mall due to the great damage it inflicted. Instead it was held in Potomac Park, a more accommodating, if considerably less stimulating setting. (Also much harder to reach by public transportation—a shuttle carried visitors from the park to the closest Metro stop.)

So now the showcase is coming to my own backyard, and I couldn’t be more excited about it. The progressive nature of the decathlon seems a better fit for the left coast. Tim Shaw, the manager of external affairs for the Great Park, notes not only that California has an enormous amount of available sun, but is also home for many other innovators. (I like the idea that both Fiskar and Tesla are headquartered here. Maybe they’ll provide NEVs for folks to tool around the display grounds.)

It would also appear that California schools will have better representation in 2013 (the event is held only in odd-numbered years). In addition to Sci-Arc and Cal Tech, USC will participate. The potential for a friendly cross-town rivalry emerging in the California delegation is something to eagerly anticipate.

In my experience, there are always a couple of take-aways from the decathlon that get under my skin and begin to influence my work, even in the multifamily sector. Three years ago it was moveable partitions and built-ins that really provided a sense of “user configurability” in the dwellings. From last year, the “whole-house power kill switch” located by the back door of the Sci-Arc/Cal Tech home stuck with me (as well as that marshmallow-y exterior, which was really cool, if not for everyone), and I’m already seeing the idea show up in some supportive housing projects, so it’s only a matter of time before it appears in market rate apartments.

So mark your calendars for fall 2013! And need I make a shameless plug for Orange County, California tourism? While you’re here to check out the techy-est tract on earth at the Solar Decathlon, you can schedule a side trip to the Magic Kingdom or Surf City, USA. If you’re looking for a local guide or host, drop me a line.

Posted by JFiur at 1:30 pm

‘What Renters Want’ with Jessica Fiur: 7 Things Renters in Their 70s and Beyond Want in an Apartment (And 1 Bonus)

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Jan 272012

Whether they’re seniors looking for housing or they’re looking for “seniors housing,” renters in their 70s and beyond have specific wants and needs on their apartment wish lists. And, boy, they’re not shy about letting you know it. Don’t let their age fool you: renters in their 70s and beyond want all the bells and whistles of an apartment that people first looking for apartment want (except, maybe a kegerator. Though, who are we to judge if they do?).

7 Things Renters in Their 70s and Beyond Want in an Apartment (And 1 Bonus)

Near Culture. Museums, theater and the local cinema, renters this age want to soak up some local color. (Side note: When you hear that phrase, does anyone else picture that I Love Lucy episode where she has to stomp the grapes to make wine? Anyone? Bueller? Must be just me…) Bars, rock concert venues and uber trendy bistros are probably not going to be strong selling points for this age group.

An area to socialize. Does your community offer a common area or a club house? Renters in their 70s and beyond will love to get out of their apartments and socialize with other residents (especially other residents their own age). Also mention activities that your community features, if any–arts and crafts, classes, lectures series, etc.

Accessible to public transportation. Just because many renters in this age bracket aren’t in the job market anymore doesn’t mean they don’t want to get around town quickly and conveniently. Public transportation is important for renters in this age bracket, especially for those who don’t drive. These renters have to get around somehow, after all! Additionally, you might want to point out alternate forms of public transportation that are near by, in case the main one won’t do. (For example, if a nearby subway involved walking down steep steps, also mention local bus stops.)

On the first floor or with an elevator. Again, stairs might be an issue for renters in their 70s and beyond. Leave the walk-ups for those in their early 20s!

Modern appliances. Seems this is what everyone wants. Whether it’s because of the cooking show explosion, or simply because people don’t want to put in additional work on their rentals, but if your kitchens and bathrooms aren’t updated, you might as well have tumbleweeds rolling across the apartment (symbolic ones, I’d hope). Renters in their 70s and beyond want updated kitchens (the better a certain grandmother can bake a certain granddaughter her famous chocolate chip cookies) and updated bathrooms. If you have them, you might also want to point out showers or easy access bathtubs.

Lots of natural light. My grandmother, specifically, said she would want an apartment facing southeast, so she would be able to enjoy the sunrise and the ensuing warmth throughout the day. If that’s not possible, lots of windows are always an attractive feature.

24-hour security. This is key. Safety is an important issue for renters in their 70s and above, who would like to know they have protection against intruders, or if they hurt themselves in the apartment and need assistance.

Bonus Possibility

Technology. This might not be for every renter who’s in this age group. But if you offer free WiFi in your lobby, or if you have a Wii playing station, this could be an interesting selling point. Many people in their 70s and beyond are going online and gaming and would love these features.

Anything I’ve missed?

-Jessica Fiur, News Editor

Read what renters want in their early 20s, late 20s to mid 30s, 30s to 40s and 50s and 60s.

Posted by JFiur at 12:42 pm Tagged with: ,

‘What Renters Want’ with Jessica Fiur: 9 Things Renters in Their 50s and 60s Want in an Apartment

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Jan 192012

Because of the mortgage crisis, many people in their 50s and 60s, who would once be proud homeowners, are renting. And some empty nesters feel that their house is just too big for them now (and when they tried to turn your old bedroom into a jacuzzi room, they flooded the second floor), so they want to downsize to an apartment. So what are renters in their 50s and 60s looking for in an apartment?

9 Things Renters in Their 50s and 60s Want in an Apartment

Luxury. After years of work and probably cleaning up after the kids, they’ve earned it, baby, and they want those goodies. Renters in this age bracket do not want to drag their laundry for blocks or have their packages delivered to a friend’s address because no one is there to sign for them. They want in-unit (or at least in-building) washing machines. They want the 24-hour concierge. They want the la-di-da and chi-chi things that they eschewed their whole lives. And, after working for many years, they can probably afford it.

Modern appliances, updated kitchens and painted walls. Basically, renters in this age group want their apartment move-in ready. (Just because their current residences might be equipped with an avocado-colored refrigerator and shag carpeting doesn’t mean they like it.) They don’t want to deal with ovens that don’t work. Or grimy bathtubs. Or the tape silhouette of the previous resident sprawled out on the living room floor.

A nice view. A view into the back alley dumpster just won’t cut it anymore. Renters in their 50s and 60s want that nice view of the city or of the water, or whatever your area has to offer. (Which could include a view into a svelte neighbor’s bedroom. Who are we to judge?)

Parking, near transportation. If they’re still working, they certainly don’t want to be. So they’ll want their commute to work to be as painless as possible. Plus this will make running errands a lot easier.

No stairs. Elevators are important when it comes to bringing up groceries, or simply getting to the apartment. Some renters in their 50s and 60s have difficulty walking up stairs, so those become a safety hazard. Plus, who even has a Slinky anymore?

Near theaters, restaurants, etc. What’s there to do around town? No one wants to just sit around in their apartment all day, no matter how luxurious the place is. Renters in their 50s and 60s want to eat out at the nice restaurants, go to the movies, check out a local museum, see a show. Bonus if you mention local or community activities they can get involved in, such as lectures, local theater groups, etc.

Safety. 24-hour security systems are important, especially if it’s a single resident.

Around people their own age. Renters in their 50s and 60s don’t want to be surrounded by teenagers in the building fitness center (actually, no one wants to be surrounded by teenagers. Not even teenagers) or drunk 20-somethings coming in and out of the building at all hours of the night. They want to be around people their own age, especially if they’re empty nesters.

An extra room. Just because they’re probably sleeping in one bedroom (renters in this age group usually don’t look on Craig’s List for roommates) doesn’t mean they wouldn’t want a two-bedroom unit. In fact, quite the opposite. They can use the room for an office, or as a guest room–for when the grandchildren visit, of course. (Sigh. Subtle, this age group is not.)

What else do renters in their 50s and 60s want in an apartment?

Read what renters want in their early 20s, late 20s to mid 30s and 30s to 40s.

 -Jessica Fiur, News Editor

Posted by JFiur at 2:01 pm Tagged with: ,

‘Gimme Shelter’ with Daniel Gehman: An Apartment Bubble? Seriously?

"Gimme Shelter" with Daniel Gehman, Harley Ellis Devereaux 1 Response »
Jan 182012

Recently I’ve heard murmuring from a couple different quarters that there could be a bubble forming in the rental housing sector. It has been suggested that in some markets, development talent and money started to flow into multi-family projects about a year after the economy crashed because it needed somewhere to go. Consequently, lots of new apartments were constructed (or are in the process of being entitled, designed, and constructed), leading to too much supply, which was having a flattening effect on rent growth. Furthermore, fears were expressed that since renting, in some markets, was now more expensive than buying, pressure was building for a flight back into ownership of the 3 percent, give-or-take, of Americans who moved from owning to renting in the housing crisis because they had no other options.

Huh. I suppose this could be happening, or about to happen. I’ve even heard a bit of testimony from a colleague in the Midwest that some evidence of this has surfaced. I don’t get much sense though, from scanning the press, that it is at all widespread.

So it got me to thinking about a few things.

First, whenever there’s a discussion of “the housing market,” it is invariably concerning single-family dwellings. Since nearly two thirds of everybody lives in them, this makes sense. A multifamily community, on the other hand, is a different animal. Individual residents don’t sink their life savings into a down payment on an apartment; nor do they reap the economic benefits of expanding equity in those glorious times when SFDs are actually increasing in value. (Remember that?) Renters are also highly mobile, and leaving a rental apartment may be sad, but it is rarely the devastating event that losing one’s home can be.

 

“Bubble” suggests over-eager, and perhaps under-educated persons buying into something when its price has been driven to the point where there’s no escalation room left. One day the bluff is called, a selling frenzy ensues, and losses, some massive, are incurred, especially for those who got in right near the end.

Could it be possible that too many apartments are being planned or built right now? Not from what I read. First, it is possible that the paradigm has been reset, and many among the 3 percent mentioned above will simply not return to housing ownership. Beyond that, simple birth rate and “un-coupling” are expected to continue to keep demand percolating at a decent clip for a while yet, and the pause in apartment construction over the last few years created a deficit that will be some time in the filling.

Locally (LA), I keep wondering what will happen if the right nexus of influences occurs that leads renters to start moving back into for-sale housing. I’m thinking particularly of a decent number of condominium projects that were constructed and never sold, but rather rented. Say it began to be evident in the marketplace that renters were starting to evacuate in droves. How many moves from a condo-rented-as-an-apartment would it take for a building owner to start scratching her head and thinking, “hmmmm . . . is it time to put these puppies back on the market?”

I expect it would take a lot, and I don’t see that happening anytime soon. On the other hand, one might argue that the gestation period for a new apartment building, if one started the entitlement process today, is a minimum of 3, and possibly more like 5 years. How many renters will be getting the itch (and down payment, and loan approval) to bail in 2016? I guess I’m arguing that if the for-sale condominium market really ratchets up, then the other 80 percent of the residents of a building that’s being un-rented will need a place to go, won’t they?

Too bad my crystal ball is still broken.

Posted by JFiur at 9:07 am
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