The demand for apartments may be coming at least in part from would-have-been homeowners. A recent survey by Fannie Mae found the number of people agreeing that homes are safe investments has fallen 13 percentage points over the past seven years to about 70 percent. Another recent survey by the National Foundation for Credit Counseling found that about half of respondents say homeownership is not a realistic way to build wealth. The polls were highlighted in a Washington Post article over the weekend titled “Economy has shifted Americans' attitudes about homeownership and money”.
Victor Calanog, director of research for New York-based research firm Reis Inc. states in a column for National Real Estate Investor earlier this week that the national apartment vacancy rate remained flat at 8% in the first quarter instead of rising as it typically does during the colder months thanks to the strongest first-quarter absorption level (20,000 units) he’s seen in the past 10 years. The data, including a mild uptick in asking and effective rents (0.1% and 0.3% respectively) has him thinking the market is on the “cusp of a recovery.”
In the Portland area, average vacancy is 5.6%, according to Mark D. Barry’s winter 2010 report, and the metro area’s average vacancy rate has been decreasing. Barry will present his mid-year report at HFO’s next investor forum in May. Investors wishing to attend may e-mail firstname.lastname@example.org or call their HFO broker.
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A recent survey by Fannie Mae found the number of people agreeing that homes are safe investments has fallen 13 percentage points over the past seven years to about 70 percent. Another recent survey by the National Foundation for Credit Counseling found that about half of respondents say homeownership is not a realistic way to build wealth.
* * *The relatively low vacancy helps explain why Urban Development Partners NW LP is building locally. The company is finishing up construction on a 13-unit project at SE 31st and Division and is preparing to break ground on a 26-unit project at SE 38th and Division this summer, according to the Portland Business Journal. Project equity is coming from its sister company, Willamette Capital Management Ltd.
The current project includes two floors of residential above 8,000 SF of retail. It incorporates an existing one-story structure that used to house Reliable Parts. The project includes a private courtyard for residents. The next project will have three floors of one- and two-bedroom apartments over 5,500 SF of street-level retail. An existing single-family home on the site will be reoriented toward 38th to act as a buffer for the residential neighborhood. Both projects are classified as high-end, high-design properties with limited amenities. Asking rents are reportedly $2.20 per square foot for units at the front of the building and $1.61 per unit for those at the back, which would put them at the top-end of the close-in Southeast submarket. The development reportedly plans to own the properties long-term. "We’re not out to make a quick buck,” UDP partner Eric Cress told the Business Journal