Earlier in the year, there was almost a panic caused by the 26% surge in apartment construction sites. Many people believed that this could cause a housing glut, but according to a recent report from the commercial real estate analysts, Reis, the surge in apartment construction is actually enough to meet the surge in demand for apartments.
The number of vacant US apartments is 380 basis points below the 8% seen at the end of the 2009 recession. The demand for apartments has risen by 4% during the last quarter of 2013, which has pushed rent up 3% since last year. Meanwhile, there have been 34,834 units constructed during the quarter, which is a whopping 21,237 more than last year, and the highest it’s been in 4 years.
The supply and demand for apartments is largely relative to geographical location. Apartment vacancy during the second quarter of 2013 was higher in the cities than it was in the suburbs but not by enough to make much difference statistically.
Who’s looking for Apartments?
The fact is that the single family home prices are still recovering, and strict guidelines for first time lenders mean that many people are still being forced to rent apartments. Another problem is that with the rising rental prices for apartments, a lot of people have been priced out of their preferred city or town.
Micro apartments are an alternative for people who might not have enough cash to live in the city apartment that they’ve always wanted, but they could have a tiny slice of the action with a micro apartment situated in the city they love.
The micro apartment is typically under 200 square feet with a private bathroom and a kitchen shared among several other micro apartments. The mini apartments often come fully furnished with clever, space saving furniture that makes the most of the small space provided.
Micro apartments have already proven popular in places like Seattle where there is over $1,000 difference between the monthly rental price of a micro apartment and a regular apartment in the same area. The micro apartments create a kind of small community for all that live there. They have similarities to a shared home while being slightly more private due to the private bathroom. They seem to be increasing in demand and popularity.
For the Property Managers
With the demand for apartments on the rise with no sign of slowing down any time soon, property managers need to be at the top of their game. Soon there will be more people buying properties as investments.
It’s important for property managers to constantly look for the best options for their clients. This includes carrying out thorough property inspections, creating valuable reports for their clients and being able to choose the perfect apartment for the tenant and vice versa.
Property managers who want to get ahead will recognize the opportunity that the surge in demand for apartments creates, but they will be smart about how they utilize it.