Jan 15 2006
Condos have been the big story in multifamily housing in the past year, representing half the new multifamily units built.
They’re likely to continue to be a major factor in many markets, according to Jerry Starkey, president and chief executive officer of WCI Communities of Bonita Springs, Fla., speaking at a press conference today at the International Builders’ Show.
In 2006, Starkey predicts more competition. The inventory of existing condo units will be larger and, while there are increasing numbers of buyers attracted to the condo lifestyle, some will be constrained by high prices and rising interest rates. Rental apartments, which traditionally serve those who choose not to buy or cannot afford to buy, are in shorter supply these days.
According to developer Eric Bluestone, president of the Bluestone Organization, Fresh Meadows, N.Y., many apartment communities have been converted to condominiums, especially in hot condo markets such as the New York City area and South Florida. To further complicate things, developing new rental apartments has become more difficult, because condo developers are willing to pay much more for land than rental developers.
In many markets, the shortage of rentals – especially affordable rentals – has pushed rents quite high.
While Bluestone notes that the Low Income Housing Tax Credit program continues to create opportunities for workers who make less than their area’s median salary, the number of such communities is limited. Even in the tightest, most expensive markets, well designed communities with attractive features fill up first. Bob Koch, principal and director of Fugleberg Koch Architects in Winter Park, Fla., designers of multifamily communities all over the country, spoke about the return to urban living and the popularity of lofts, as well as other factors that today’s multifamily renters and buyers consider important, including the need to feel secure at home, and to have expanded access to home technology and convenient services.