The Columbus housing market has changed remarkably over the past year. One of the most recent trends affecting the property market is the sudden surge in apartment rentals. According to WBNS-10TV, the apartment boom could impact homeowners in different ways, which may also affect the market for housing renovations.
History of the Columbus Apartment Boom
Columbus faced a serious shortage of apartment rentals during the recession. Developers only created 5,000 housing units in Central Ohio between 2006 and 2012, despite the fact that the population grew by 100,000. The market corrected shortly after the recession ended.
In 2014, the supply of apartment rentals increased slightly more than the number of single family houses for the first time since the 1980s. Rob Vogt, a partner in Vogt Santer Insights told the Columbus Dispatch that the market proved far more resilient than experts initially predicted.
Columbus real estate experts are trying to make sense of the precarious, new trend. There are several possible factors that may be playing a role:
- One factor could be the anemic wage growth experienced during the recession. People will probably have an easier time affording a new apartment, but can’t easily afford a new house.
- Banks have remained reluctant to lend money to consumers, in spite of the fact that the economy is gaining steam. Speculation that Federal Reserve Chairwoman Janet Yellen will raise interest rates has also fueled concerns that some homeowners would default on variable interest mortgage rates.
- The population density of Columbus is growing rapidly. Developers may start to run out of area to develop new properties.
All of these factors indicate that there may be a growing housing shortage on the horizon. As a result, many homeowners may invest in new renovations to increase their property value to sell at a significant premium down the road. However, it is also possible that homeowners may be reluctant to make improvements that may cause the value of their house to increase above prices the market is willing to pay, because they may have to reduce their prices.
Their decision may ultimately be dependent on the direction of the market. However, most homeowners will probably try to make necessary improvements to preserve their homes to ensure they last, since housing will be such a valuable asset in the coming years if the shortage is not adequately addressed.