While attending the 2015 RASCW Commercial Forecast, I quickly realized that the focus of discussion is still on the Madison apartment boom. When will it come to an end? Or, is it only just beginning?
2014 closed up with an astonishing 5,300 apartment units either completed, under construction or approved, according to the numbers provided by Jay Wendt of City of Madison Planning and Development. Madison currently has roughly 50,000 units, making this a landmark 10% increase! Many of these apartments are in the mid to high-end price range and “people don’t seem to bothered by higher rent prices,” said Kevin O’Driscoll of Anchor Bank. Most of us know that the apartments are driven by Epic’s hiring of younger people and supplying them with some disposable income so they’re able to rent mid to higher-end units. But, how long will this trend last, and how long will these people rent before they become interested in buying, if ever?
In an article by Michael Ivey of The Capital Times, Michael Thorson, managing director of Inventure Capital cited that they had figures showing the city could absorb around 4,500 new apartment units over the next five years. Interestingly enough, the City of Madison had more apartment units than that in the works for 2014 alone. Inventure Capital’s data, in part, is driven by the generational shift away from home ownership. But is that shift a trend that will continue, or will young people soon realize they could pay the same or slightly more for a mortgage? Many experts seem to think that renting will continue to rise, and they are willing to put hundreds of millions in new apartment construction on it.
What do you think? Does Madison have too many apartments, or not enough? Post your comment below.
Slide: Jay Wendt, City of Madison Planning & Development