Comments on: Apartment Dwellers Staying Put? http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html Redfin Seattle Sweet Digs Mon, 23 Nov 2009 07:13:24 -0800 http://wordpress.org/?v=2.8.1 hourly 1 By: unknown http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html/comment-page-1#comment-2230 unknown Thu, 12 Jun 2008 15:03:31 +0000 http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html#comment-2230 I think it may be a simple answer: 19-28 year olds are graduating, stabilizing, and staying in the area only to find home ownership an impossible dream. Seems some are stubborn enough to stay in the area and rent. Me being one of them... I think it may be a simple answer: 19-28 year olds are graduating, stabilizing, and staying in the area only to find home ownership an impossible dream.

Seems some are stubborn enough to stay in the area and rent. Me being one of them…

]]> By: Apartments Up, Deano’s Down | Redfin Seattle Sweet Digs http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html/comment-page-1#comment-2215 Apartments Up, Deano’s Down | Redfin Seattle Sweet Digs Mon, 09 Jun 2008 18:34:14 +0000 http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html#comment-2215 [...] « Apartment Dwellers Staying Put? Respect Thy Contractor and You Will Go Far [...] [...] « Apartment Dwellers Staying Put? Respect Thy Contractor and You Will Go Far [...]

]]> By: Michael P Lindekugel http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html/comment-page-1#comment-2213 Michael P Lindekugel Sun, 08 Jun 2008 22:39:30 +0000 http://blog.redfin.com/seattle/2008/06/apartment_dwellers_staying_put.html#comment-2213 During the housing boom, cheap capital or loans made it possible for more people to buy. That demand coupled with low supply created price pressures and an increasingly unaffordable housing market. Some developers began to build less expensive housing such as town houses and condos. Some builders chose to capitalize on condo conversions. The return on capital for a condo conversion was higher than the return on capital for maintaining a rental asset and higher for building condos. As a result +5000 apartment units were converted to condos. That had a huge impact on the rental supply. After years of higher vacancy rent rate stagnation, the rental market changed. The housing market was booming to a point that ownership was not possible even with the cheap credit. The rental boom is experience very low vacancy and very high rent. With the housing slow down some condos are reverting to apartments because the tide has turned. The return capital for apartments is higher than condo development. There is still a rental supply shortage. Apartments are being built but not fast enough to have any significant impact on supply to lower rent rates. Housing prices are still too high for renters to buy. Those who bought condos or single family homes zero down, low down, or as investment (bad) can’t rent them for enough to cover the mortgage despite the hot rental market. Expect the low vacancy and high rents to continue for a few more years. During the housing boom, cheap capital or loans made it possible for more people to buy. That demand coupled with low supply created price pressures and an increasingly unaffordable housing market.

Some developers began to build less expensive housing such as town houses and condos. Some builders chose to capitalize on condo conversions. The return on capital for a condo conversion was higher than the return on capital for maintaining a rental asset and higher for building condos. As a result +5000 apartment units were converted to condos. That had a huge impact on the rental supply.

After years of higher vacancy rent rate stagnation, the rental market changed. The housing market was booming to a point that ownership was not possible even with the cheap credit. The rental boom is experience very low vacancy and very high rent. With the housing slow down some condos are reverting to apartments because the tide has turned. The return capital for apartments is higher than condo development. There is still a rental supply shortage. Apartments are being built but not fast enough to have any significant impact on supply to lower rent rates. Housing prices are still too high for renters to buy. Those who bought condos or single family homes zero down, low down, or as investment (bad) can’t rent them for enough to cover the mortgage despite the hot rental market.

Expect the low vacancy and high rents to continue for a few more years.

]]>