A recent article published on the Wall Street Journal reported a curious shifting trend in the construction of apartment units in U.S. cities.
According to the piece, these newer dwellings are generally larger than those built in the five years prior. In 33 out of 92 American cities, apartment sizes increased by an average of almost 50 square feet.
Many experts link this growing trend to the ongoing coronavirus pandemic. If that is the case, is this just a fad or the new norm? How will it affect buyers and renters?
This article will look into why this shift is happening and how it can impact people looking to buy or rent apartments in the future.
Demand for bigger apartments has significantly increased in the past year. Although several markers have hinted to this shifting preference even before the pandemic, it has taken on new, stronger traction as lockdown measures took full-swing and subsequently subsided.
According to a Forbes article, aside from bigger apartments, there has also been an increase in demand for living spaces with more rooms.
Several reasons can further be investigated to explain this sudden rise in demand for upsized and multi-room living spaces.
One of the most notable impacts of the pandemic to home life is the shift to remote work. Many companies and businesses opted for more flexible work arrangements that enabled employees to do their work at home.
This change also coincided with the directive for students to also undergo home-schooling.
According to the previously mentioned Forbes article, this sudden change of work and school arrangements pushed many to prefer more individual spaces at home so they can perform their tasks without interruptions.
Some households have opted for bigger apartments with more rooms, while many also shifted their attention to suburban life.
Although this is not entirely related to the pandemic, many Millennials have reached the age when people are usually considering buying their own residential properties. However, several factors like affordability, marital status, and stricter lending standards are preventing this generation from purchasing their first homes, according to Investopedia.
Instead, many Millennials are now opting for more spacious accommodations for their families.
Before this past year, smaller living spaces were more profitable for residential developers.
But since several factors affecting the rise in demand for bigger places are not likely to change anytime soon – including remote work arrangements and the rise of Millennial buyers/renters – it is also unlikely that this trend of bigger spaces will subside.
For more real estate trends or if you need seasoned Syndication partner to help you invest in multi-family apartment properties, give us a call or fill out our online form to get in touch with us.