You can’t drive very far in Kansas City without seeing new apartments under construction or an older building being redeveloped into apartments. What is going on here and how does it affect both the residential and commercial real estate market?
I sit on an advisory board for the Johnson County appraiser’s office, so for the purposes of this article, I will share statistics for Johnson County. There are currently 2,369 apartment units under construction in 12 different projects.
There are estimated to be another 1,128 starting construction soon for a whopping total of 3,497 units. On the drawing board and proposed apartments are at 4,679 units.
What are the demographic forces driving this wave of construction? It seems that the younger generation isn’t feeling the need to own a house at this point in their lives. They like to be able to come home and not worry about cutting the grass or doing maintenance. They want to have the freedom that an apartment brings. My daughter is the exception to this rule. She wanted to actually own something versus paying rent (and of course she has her dad around for helping with the maintenance).
However, I firmly believe that once a young couple living in an apartment starts planning a family, they will be interested in owning a house.
There they can have a yard, a dog, a school nearby, and a kitchen for making apple pies. I can’t see them raising a family in a loft in downtown KC.
The other interesting demographic are the aging baby boomers. They have had their houses for many years and raised their kids, and now they are working on enjoying the remainder of their life. They do not want to be raking leaves, cutting the grass, putting new roofs on, or replacing air conditioning units. They may want to move into the city to be closer to restaurants, galleries, and cultural events.
There is something attractive to them being able to lock up and leave town for a week, a month or longer.
At some point we will no doubt be over-built in apartments. But in the meantime, it’s something that we will all get used to. Life is all about choices, I think that there comes a time when apartment-dwellers will want more privacy and times when homeowners want less hassle. It really bodes well both for single-family sales as well as multi-family sales.
ContactReece Commercial for more information.