Lane Co. wanted to attract echo boomers to a midtown Atlanta project. So the firm launched an aggressive, "sexy" ad campaign, said Bill Donges, CEO of the Atlanta-based multifamily housing developer.
The campaign worked-with a twist. Instead of attracting the young, hip urban crowd, 60 percent of Donges' customers were baby boomers. "You are seeing baby boomers wanting to come back," he said.
Unlike their single-family counterparts, market-rate multifamily builders seemed fairly optimistic during Wednesday's "Forecast and Trends in Multifamily" press conference at the International Builders' Show in Orlando, Fla.
"The reports of our death are greatly exaggerated," said Steve Patterson, president of ZOM, an Orlando, Fla.-based apartment owner and manager.
Boon for Rentals, Even Condos
Patterson said homeownership rates have fallen nearly a full percentage point. Many of those people no longer own homes because they can't pay their mortgages. Yet they need a place to live. And the apartment industry is waiting with open arms. Furthermore, many of the people currently residing in rental housing will be forced to stay put since credit is more difficult to come by than it was during the housing boom.
These same demographic and geographic advantages are present in the condo market. Yes, in many markets-South Florida and Las Vegas, for instance-oversupply remains the buzzword. Donges said that sales deteriorated throughout 2007, but really fell off after the credit markets begin to crack in August.
So far, Donges reports that business has started to pick up in 2008. With many condo builders offering deep price cuts and lavish incentives and options, there's definitely incentive to buy, so long as people have the money for a downpayment.
"The condominium market is here to stay," Donges said.
Affordable Housing is a Cautionary Tale
The problem, Swank believes, is that HUD hasn't provided enough funding to bridge the cost increases that many affordable apartment owners and builders are facing.
"Many developers are finding negative cash flow in their properties," Swank added. If a new administration doesn't stem this tide, there could be serious problems in the affordable arena. These developers and apartment owners may find that it's no longer profitable to operate their affordable properties.
"We're concerned there will be a massive number of properties returned to the housing authorities," Swank said.