The housing market in the US, making tectonic move on our very eyes. It hard not to see that all the efforts and investment went all together in to one place; apartment complexes. America becoming taller and people closer to each other at least geographically. In July 2016 RLB reported 50 construction cranes just in city of Seattle it’s 50 percent increase in one year, and most of it for building residential buildings or mixed use, where businesses located on lowest levels, and living spaces on top. Beside Seattle and fast growing all the area around Seattle, Tacoma News Tribune reports that Thousands of units planned in Pierce County (http://www.thenewstribune.com/news/business/real-estate-news/article115256298.html)
Rent prices are historically high and index affordability around Seattle, is going down the drain. Highest rental prices in downtown Bellevue; one bedroom apartment starting from $1700 per month an $2700 for two bedroom. If you want to get yourself in hart of Bellevue; Lincoln Square, two bedroom penthouse with 1,700 sq.ft might cost you up to $10,465 per month. Therefore within luxury expensive apartment complexes, more affordable housing has been building up. But only problem with affordable housing is income limit. Requirement is that for instance family of three should make at least 2.5 monthly rent, but no more than $48 thousand a year. Two-bedroom apartment for family of three people at Grand View, brand new apartment complex at Kent, will cost $1,168 per month. Essential point; you don’t have to have a crystal ball to see that bank switched their gear toward multi housing. Instead of dealing with hundred thousand of mortgage application then with thousands of foreclosures, they decided that it would be easy to do business with big corporations and reap benefits from drastically growing rental prices. Therefore, we should not expect that mortgage landing conditions will lose any time soon.
What in all of that for single family homes owners or those who are planning to buy one. All that information is good news. It means that prices for single family will stay strong and will go higher and wont crash. That why private hedge funds, Berkshire Hathaway one of them, keep buying single family homes around the country, because USA real estate has shown that it one of the best investment heaven in the world, yes, it’s better than gold, it not just laying down in the bank, it brings monthly income and growing equity. So, all home owners might feel proud of themselves, you are on the right side of the market this time.
I don’t want to be a bad messenger, but it looks like next crush might happened in multi housing market, because when millennial will get serious about building their family, and raising kids, they will start looking toward single family homes, more space for kids to play, good school, and parking space for their 7 passenger vans. They will run out of cities to suburbs. So, if you want to buy, buy single family home, and stay away from condominium. It might be not good bet.