Housing demands are fluctuating as job markets change. With jobs and income levels bringing more people back to bigger cities, there is a growing demand for large apartments and family rentals. Commercial realtors are finding great opportunities to build larger apartments, as home ownership has grown stagnant in recent years, with rental costs increasing. Young professionals, as well as 40-somethings, are now raising families in these rentals to be closer to jobs, meaning the commercial real estate market sees a growing need for family-sized units.
Highest Housing Needs No Longer Millennials
Younger professionals continue to look for housing in urban areas and many commercial real estate developers focused on that demand. Now another segment of the population, the 30 and 40-somethings with families, needs affordable rental housing, with little property available to handle this demand. Because home ownership is out of the question for many in this age segment right now, many of those who might otherwise own a home in the suburbs are remaining closer to work and raising their families in rental units.
Compounding the issue is a definite lack of rentals, single-family housing, or larger apartments to serve families in these situations. There is also a growing demand for larger apartments for seniors moving from owning homes into rentals who still want larger spaces, with room for visits from family.
Large Apartments In Demand
Most apartment complexes and buildings offer numerous units in the studio, one, and two-bedroom apartment range, which caters to most needs. From new graduates to seniors, these smaller living spaces are plentiful, affordable, and in abundance as real estate developers have recently answered the call for more urban rentals. Commercial realtors are now beginning to recognize this new demand, as the need for family-sized apartments continues to grow.
Apartment building owners support these findings, stating that larger units with three and four-bedrooms have very little turnover, almost no vacancies, and occupancy waiting lists. Property owners definitely agree there needs to be more larger units available to satisfy the current housing demand.
Opportunities in Large Apartment and Single Family Rentals
Commercial developers looking for a viable market may find opportunities by catering to the large apartment demand. Although complexes attracting these tenants may require more family-oriented amenities, the investment in renovating complexes or building new ones to suit may well be worth the effort. Of an estimated 18.4 million rental units in the U.S. today, only 8.7 percent of those are three-bedroom or larger, inadequate to fill the current need for family rentals.
Based on these findings, developers who work with the help of local commercial realtors, do their homework, and find the right location should have no trouble attracting tenants for larger apartments and affordable single-family housing. Commercial realtors who serve these commercial real estate markets can help investors and developers determine the best locations for new construction or find areas where renovation projects are available. In either case, the door is wide open in the commercial real estate market for those interested in filling this need!