Why are all the new Channelside buildings going to be rentals? (appointed, for sale)

[jsun556]

So far it looks like Martin, Intown and Skyhouse have been approved and will be developed. According to reports, all three residential towers are going to be for lease only and not purchase.

I don't understand why this is. Surely there is a demand for purchases, is there not? I know I would be interested in buying if it were available. Skypoint isn't an option. From what I've researched, the association there is a gestapo and the building's quality has become questionable... likely due to no competition.

[craigtnelson]

Probably because they're betting on increased demand from 20/30somethings who want to live downtown but don't have the disposable income (yet) for the purchase of a luxury apartment.

Now if Buckhorn lives up to his potential of revitalizing downtown, it'll help spur the growth that they're betting on.

[jsun556]

Originally Posted by craigtnelson

Probably because they're betting on increased demand from 20/30somethings who want to live downtown but don't have the disposable income (yet) for the purchase of a luxury apartment.

Now if Buckhorn lives up to his potential of revitalizing downtown, it'll help spur the growth that they're betting on.

I'd like to know how many 20-somethings they think can afford $1500/month starting for a studio sized apartment.

I would hope the 30-somethings with that kind of income are smart enough to realize they could afford a house with much bigger space for much less.

I guess I just don't see the point of being "house poor".

[bentlebee]

Many people are wondering this since there are plenty of buyers out there willing to buy.

[craigtnelson]

Originally Posted by jsun556

I'd like to know how many 20-somethings they think can afford $1500/month starting for a studio sized apartment.

I would hope the 30-somethings with that kind of income are smart enough to realize they could afford a house with much bigger space for much less.

I guess I just don't see the point of being "house poor".

Because many young folks don't look long term yet, and don't have down payments stashed away for buying.

Well, that and many times they're still concerned with being around other young folks without kids.

[Occifer]

Every apartment wanted to go condo seven to eight years ago because real estate prices were going up so high they realized that they would make more money selling small units for exorbitant prices than renting them out and having the expenses that go along with managing a property. Now that real estate prices (especially condos) have gone down 50% or more from their peak, renting is more profitable for the landowners.

Keep in mind that certain developments in Channelside like Slade and Seaport were originally designed to be condos but changed into rentals when the market went south. They did that because the developers couldn't get what they wanted for the units so they figured they would make more as rentals. As prices go back up and if the Channel District really does boom like people say it will, I'm sure all of these places will eventually covert to condo.

It's also extremely difficult now for many condo developments to get FHA approval, which prevents a lot of buyers from being able to finance.

[tinytrump]

Originally Posted by jsun556

I'd like to know how many 20-somethings they think can afford $1500/month starting for a studio sized apartment.

I would hope the 30-somethings with that kind of income are smart enough to realize they could afford a house with much bigger space for much less.

I guess I just don't see the point of being "house poor".

You have seen me post several times that the apts off Lois and Westshore/ So-Ho are all over $1000+ it is what you pay now- I am paying $817 in an older but nice apt complex because that is the going rate... and young people -new jobs etc are not ready to buy... BUILT IT mayor!! I am estatic and people still complaining of a place they never frequent.

[jsun556]

Originally Posted by Occifer

As prices go back up and if the Channel District really does boom like people say it will, I'm sure all of these places will eventually covert to condo.

That's too bad. When you convert rentals back to ownership condos, it will just cause another condo bust. Reason being, if a development is constructed initially for rentals, the quality of the building will be rental and not purchase quality. Thin walls... poor material...

Nobody is going to want to buy a rental converted to condo. Isn't that one of the things that caused the condo crash in the first place?

I fear developers aren't looking ahead, and are only looking for the "now". In 10 years, there will be another bust due to a glut of lower quality rentals all over the place.

[jsun556]

Originally Posted by craigtnelson

Because many young folks don't look long term yet, and don't have down payments stashed away for buying.

I don't think people realize that younger folks are more financially savvy now. The developer's target demographic has lived through the recent recession at a prime age. Many have seen their families deal with financial hardship and won't be willing to throw away money just because the housing is there. The saving mindset is at a peak. I don't think developers understand that yet.

[jsun556]

Originally Posted by bentlebee

Many people are wondering this since there are plenty of buyers out there willing to buy.

I'm one of them. I even called Novare Group a couple days ago to verify if Skyhouse would be for sale or lease. Needless to say, I was pretty disappointed after that call.