This summary report by Axiometrics about urban housing needs to be read, and needs to be contextualized. It may be a bell weather, some time out... it’s also the most relevant research I have come across, but have not sourced their sources... Urban Core Apartment Growth Slowing A substantial amount of housing built in the last 15 years has shifted from the open fields on the edges of suburbia to dense central-city cores and their nearby urban neighborhoods. The trend started with SF development before the Great Recession, as changes in demographics, high gas prices and longer commutes on congested roads generated more interest in smaller homes in urban settings. MF soon followed, as developers were attracted by tax abatements and other financial incentives from cities and economic development groups that were meant to offset higher land and development costs. Much of this new MF development was concentrated in high-end, mid- and high-rise projects to maximize density while offering luxury amenities that would appeal to todays young urban sophisticate and older renter by choice residents. The following chart graphs annual effective rent growth for both urban core and suburban projects from 1990 forward. The chart (see below) clearly shows a spread between urban core properties effective rent growth and that of suburban properties, which had widened throughout 2011. To be sure, some of this growth in the spread was from the higher rents that urban core properties typically generate because of their fit and finish. But as the number of urban core properties grew and competition increased, effective rent growth slowed and, by mid-2013, had fallen below the growth rate for suburban apartments. Effective rent growth for suburban apartments has consistently averaged between 3.0% and 3.5% for the last 2½ years while urban core rent growth has slowed from a peak of more than 7% to about 2% today. Highlighting this increase in competition, the following table lists some of the most active apartment development submarkets in select secondary markets throughout the nation. All show an increase in units slated for delivery from 2013 to 2014, and all but two are either urban core or outer urban submarkets. (see below)
Posted on: Tue, 03 Jun 2014 01:48:41 +0000
Trending Topics
Recently Viewed Topics
© 2015