Huntsville Approves More Apartments
Huntsville recently issued an $18.6 million building permit for yet another apartment complex in the area. Investors seem to be banking on increased demand as there are more announcements of job growth in the area and a shift towards a 'Renter Nation' amid a 50-year low in homeownership across the US. Typically, when you have new jobs coming to the area, oftentimes people will rent for the first six months or a year to learn the area before they buy, which seems to be what investors are banking on.
It definitely feels like we have way too many apartments in the Huntsville, Alabama marketplace and it's going to be really interesting to see what happens. Obviously, this investor is getting their building permits issued as we already have higher interest rates which they’ve hopefully factored into their equation. Many of these apartment syndicators and developers likely have not, as they built these apartments and started these projects when there were 3% interest rates.
My thought is a lot of these apartment complexes are simply not going to pencil out as you potentially have too much supply out in the marketplace. Potentially fewer of these units are being rented as quickly as they had hoped and a higher holding cost may make several of these projects go belly up is what I'm predicting.
Considering the pressing need for affordable housing in the area, I hope that developers have contingency plans to convert some of these apartment complexes into multifamily condos or townhomes for sale. This would address the affordability issue and help balance the housing supply in Huntsville.
If you're currently renting in Huntsville, don't be a victim of the 'Renter Nation' trend. Contact us today or shoot us an email at firstname.lastname@example.org and we can show you all the affordable housing options that are here in the Huntsville, Alabama market.
Posted by Matt Curtis on