Ballard Apartment/Condo Complexes in 2013 - Price drop imminent?

[Hemlock140]

I have spent a lot of time in Ballard, and what is happening is that older homes on larger lots, most of which were rentals are being torn down and replaced by 2 smaller homes or small town homes with 2-4 units. That reduces the available rental homes and drives up the rents.
As the new apartments go up, that much less land is available, driving the price per sf up.
Whether the commute is nasty or not, it's still the most popular place in Seattle for families and one of the top 2-3 for young people.

[mkarch]

Originally Posted by Hemlock140

I have spent a lot of time in Ballard, and what is happening is that older homes on larger lots, most of which were rentals are being torn down and replaced by 2 smaller homes or small town homes with 2-4 units. That reduces the available rental homes and drives up the rents.
As the new apartments go up, that much less land is available, driving the price per sf up.
Whether the commute is nasty or not, it's still the most popular place in Seattle for families and one of the top 2-3 for young people.

I see what you're saying, but don't think the impact is high enough to be important. These are two different trends mixed together - the replacement of cheap, poor condition older homes as inexpensive rentals (gentrification) and net migration to the neighborhood.

Replacing one rental house with 2-4 units does increase supply over the long run. Not all of these units are going to be owner occupied, and for the ones that are the owners likely vacated a rental nearby when moving in as new the multi-unit properties are targeted towards first time buyers.

All we can prove is the # of rental SFH's is going down. More specifically, the # of run-down, undersized low rent houses near arterials is decreasing. At the same time, the number of rental units is set to increase very rapidly, requiring a huge increase in migration to keep rents at the current level. This, at the same time that thousands of similar buildings are being built in competing neighborhoods.

I'm not disagreeing that Ballard is a desirable neighborhood (heck, I bought near there for a reason!). Just that mid-high end rentals may be temporarily overbuilt since it's not the only popular neighborhood expanding at this pace.