The last month of the year traditionally is a slow one for residential housing sales, as weather, holiday activity, travel and school breaks collide to make buying and selling houses a cumbersome task.
But if you’re itching to do some sort of real estate story, why not find an angle in the booming multifamily market? Developers, analysts and lenders all say this market is strong, driven by factors ranging from Baby Boomers downsizing to condos, to Gen Yers forced to rent because student loans and lack of jobs preclude them from being able to buy a house. Whatever the cause, recent Census Bureau figures on residential building permits paint the contrast: Single-family home permits were up less than 1 percent in October, while permits drawn for mutli-family developments were up more than 15 percent year over year, as reported by the National Association of Home Builders (NAHB).
The NAHB also recently reported that its Multifamily Production Index, a measure of builder and developer sentiment, was still over 50 (meaning, optimistic) in the third quarter for the seventh consecutive quarter. You might try to localize this by surveying lenders, construction firms and real estate developers in your area about their 2014 outlook for mutlifamily developments and what’s driving conditions locally. The group’s multifamily web portal might lead you to other sources and ideas.
Speaking of 2014 outlooks, the Urban Land Institute was out recently with its Emerging Trends in Real Estate 2014 report, published in concert with consulting firm PwC US. In addition to commercial properties like warehouses, it too has a strong multifamily forecast for the coming year; if you peruse the 100-page PDF of the full report you’ll find interesting analysis that can prompt questions for local developers; the trends report says apartment supply likely will even out with demand in the coming year, and that student housing will remain a strong development prospect; that’s a good angle to pursue if you’re near a college community. High-end rental units have a more favorable outlook than moderate-income complexes.
Aside from the business of building multifamily units — what are the particular challenges regarding financing, different building codes, zoning rules, etc. that face developers — taking a look at consumer and design trends might lead you to interesting features, profiles of specialty architects and so on.
For example, this article at MultiFamilyBiz.com, a trade publication, lists a variety of features that consumers want in new apartments, from chalkboard walls and electronics docking areas, to a place to hang bicycles near the door. Multifamily Insiders says renters are looking for WiFi, communal social spaces and plug-in stations for electric vehicles. Other publications also mention green or eco-friendly apartments; here’s a developer who adverstises “Living Beyond Green” luxury complexes featuring solar panels, extra insulation, eco-friendly landscaping practices, recycling programs and the like — is there anything similar going on in your neck of the woods? (And do these efforts make a significant impact 0r is it mostly a marketing tool; check with academic natural resources experts and the like for their opnion.)
Pet-friendliness is a recurring theme as well, Zillow reports that dog parks and pet washing stations are gaining ground. And don’t forget about businesses ancillary to apartment and condo complexes, from property management to landscaping to apartment-search guides — publications like MultiFamily Executive are a gold mine of interesting niche story nuggets like how managers can deal with hoarders and the new trend of “micro units” including these made out of former garbage dumpsters.
And as the popularity of couch-surfing and online B&B booking sites rises, you could run a localized feature on the legalities, pros and cons of taking paying guests; this recent New York Times piece illustrates how one such entrepreneur is running afoul of his co-op board. What are the rules for apartment renters, condo owners and other multi-family dwellers in your state and municipalities?