Residential Apartment Housing Market is Doing Just Fine:

The National Multi Housing Council recently issued a press release on the health of the residential markets.

Our residential markets have a lot going for them these days and are a light in a gloomy marketplace. When people wont or cant buy, they rent. The demand for rental units has risen dramatically and even rent controlled markets are seeing good returns on their investment. As rent controlled units come back on the market they are able to go to market rates. Some units are able to double or quadruple their rent flow, if a unit has been occupied for many years.

More than 2 million homeowners have lost their homes and this has contributed to the demand for rental units. Add to that the strong immigrant population and you have solid demand.
Unlike new home construction, residential development has not kept up with demand. This favorable supply demand has helped boost rent rates.

According to the NMHC report, nationwide returns to privately held apartments in the first nine months achieving an annualized rate of 12.6%. That’s a drop from the 2006 level of 14.6%, and down significantly from 21.2% returns in 2005.

Here in San Francisco, which is a peninsula with height limitations and a great deal of restrictions designed to preserve the beauty of our neighborhoods we have run into a housing crises. Our tech industry and our startup and media gulch has brought a great deal of highly paid employees into the city. Techies from Boston to Berlin have arrived with new jobs from Genentech to Google, Apple and Ebay, soaking up much of the available housing and boosting rents to new heights. The part of the city that has seen great growth in the cost of housing is that area nearest to 101. A straight shot to Silicon Valley and easy to Caltrans has made areas like Noe valley, The Mission and Bernal very desirable. Add to that the new Darth Vader like buses that have been creating a reverse commute for many of the best known Silicon valley tech firms and the Bio-tech firms in South San Francisco.

We actually cant absorb all of this and its making San Francisco a very expensive city. Of course, all of this will change if we are in a recession and the hiring pattern slows. That might help save the character of city as we have known it. Our love of odd balls and off center individuals has kept that Barbary coast atmosphere alive and well....lets hope we dont price them out of the city. Its a big part of what is so special about us, dont you think?

* The Image is the Plaza Apartments project in San Francisco

Thanks for Reading
Howard bell

No comments: