View Full Version : All Those New Apartments?



cindycat
04-14-2016, 09:31 PM
I assume there have been lots of studies done by the developers before they started construction, but we still wonder...are there really enough people wanting to move downtown and live in all those apartments and condos?

no1cub17
04-14-2016, 10:39 PM
I assume there have been lots of studies done by the developers before they started construction, but we still wonder...are there really enough people wanting to move downtown and live in all those apartments and condos?

Judging by the rents downtown and the waiting lists that used to exist (not sure if they still do), yes.

Laramie
04-14-2016, 11:30 PM
Our local economy is going through some turbulence with the energy section. Our community is much more diversified than it was with the 80s oil burst; optimistic outlook for our market to rebound.

Brett
04-15-2016, 02:36 AM
Our local economy is going through some turbulence with the energy section. Our community is much more diversified than it was with the 80s oil burst; optimistic outlook for our market to rebound.

What kind of diversity are you talking about? I hope you did not mean economic diversity because OKC it still suckling the teat of the oil and gas industry and the oil burst is a current event not just one from the early 80's.

hoya
04-15-2016, 06:29 AM
I assume there have been lots of studies done by the developers before they started construction, but we still wonder...are there really enough people wanting to move downtown and live in all those apartments and condos?

The city did a survey back around 2002 or so, I believe, and 10% of okc residents said they'd prefer to live downtown if housing were available. Right now we have housing for somewhere between 1 and 2 percent.

Teo9969
04-15-2016, 07:03 AM
I assume there have been lots of studies done by the developers before they started construction, but we still wonder...are there really enough people wanting to move downtown and live in all those apartments and condos?

The better question is do we have enough apartments for all the people wanting to move downtown?

The answer seems to be a pretty resounding no.

Pete
04-15-2016, 07:22 AM
The Urban Land Institute did a in-depth study of the likely max number of people who will live downtown.

For sprawl cities like OKC (and Dallas, etc.) their number was 6% of the metro population.

Doing the math for OKC, our MSA is about 1,250,000 so that yields 75,000 downtown residents.

If you consult our Downtown Housing Summary - OKCTalk (http://www.okctalk.com/showwiki.php?title=Downtown+Housing+Summary) you will see we have just over 5,000 living units built, under construction or planned.

Assuming 1.5 residents per unit, that's about 7,500 people.

In other words, we only have about 10% if the number of units -- even in the planning stages -- of the maximum number.


Now, when 3-4 large complexes complete about the same time then it is going to take some time before they are absorbed. But that will always be a short-term thing and even if we added thousands of units every year, none of us would live to see an over-built situation.

Canoe
04-15-2016, 07:27 AM
Why are apartments valued downtown and despised (fought against) on the edges?

king183
04-15-2016, 07:36 AM
What kind of diversity are you talking about? I hope you did not mean economic diversity because OKC it still suckling the teat of the oil and gas industry and the oil burst is a current event not just one from the early 80's.

Even with the oil downturn, Oklahoma has added 5400 jobs this year and the UE rate is 4.2%. So while we are still heavily invested in oil and gas, yes, we have definitely diversified with aerospace, biotech, IT, etc. That helps keep the downtown housing market relatively strong.

Pete
04-15-2016, 07:38 AM
^

Yep.

I've been saying for a while that any significant downturn in the local economy will be more the product of hysteria than reality.

And it's all relative anyway.... Backing down a bit from a nation-leading employment rate is not exactly a recession.

Eric
04-15-2016, 09:12 AM
In general I agree, but I do want to say it is very real for a bunch of people. This always comes to mind when I hear things like this.

http://izquotes.com/quotes-pictures/quote-it-s-a-recession-when-your-neighbor-loses-his-job-it-s-a-depression-when-you-lose-yours-harry-s-truman-187101.jpg

Laramie
04-15-2016, 10:03 AM
Truman was a down-to-earth President; didn't bite his tongue. My mother didn't like his swearing (curse words); however he continued to get the country back on track following Roosevelt's' death.

adaniel
04-15-2016, 10:09 AM
I don't want to gloss over the fairly serious challenges this area is facing, but in terms of job growth, OKC is actually outperforming a lot of the other big "oil metros" Growth year over year is about 0.9% for this area; that is running below the current national average, but more than Houston (+0.3%), New Orleans (+0.2%), and Tulsa (-0.3%). Just something to consider.

As far as apartments in the inner city, I think that so long as the come online in a staggered way the market will absorb them just fine. If there will be apartments hurt by any slowing economic conditions, it will be the ones sprouting up in cornfields off Memorial Road.

Anonymous.
04-15-2016, 10:36 AM
The demand is there, but the management and leasing procedures have hiccups. These hiccups cause would-be residents to back out or get sucked back into their old residence on another contract.

Right now the hiccups mostly revolve around construction and the dates at which units are "supposed" to be finished. We saw this at Mosaic, it is happening at Lift and also Metropolitan. Promising pre-leasers that their unit will be ready by X-date is extremely risky. But developers want that deposit money rolling in ASAP. This is why you often see "phase" move ins. However, with all of the regulations and inspections for safety and utilities - getting everything to come together at the date you promised for move-in is extremely difficult. I have spoken to individuals that work at the above mentioned complexes, and they are bombarded with calls daily from residents demanding their deposits back, or for the company to pick up their excess rent from being forced to go on 'month-to-month' at their residence they wish to depart from.

That was sort of long-winded, but maybe gives some insight as to why you may not see these large complexes (Metropolitan with 300+ units) instantly fill up despite there being a "waiting list". WHen it comes to renting, it is a very difficult process in timing things out just right - and when you throw in the randomness of new construction woes - you have what we have in downtown/midtown OKC.

I think leasing management companies need to stop pre leasing unless they heavily sandbag the move-in date, it is only leaving a bad taste in some potential resident's mouths.

Teo9969
04-15-2016, 11:09 AM
There are also a variety of stipulations involved in the process that provide some of these hiccups, no? Hasn't LIFT had a sizable portion of their complex completed for quite a while, but haven't been able to get residents in because of a small part of the law they didn't understand here? I wonder if that's not part of the total issue here. In the suburbs, it's not a big deal, because you can open up buildings 1 through 3 while finishing out 4 through 6. Here you have to open the whole thing at once, and it seems Developer's haven't figured out how to get passed that.

That + construction setbacks have made that pretty complicated.

Teo9969
04-15-2016, 11:19 AM
Why are apartments valued downtown and despised (fought against) on the edges?

Because right now, residents are valued to an extremely high degree downtown (especially considering the economic demographic of people that can afford to live downtown), and are generally considered to be good for urban development. In suburban development, space and sparcity of people is highly valued, not to mention home ownership. Suburbia doesn't concern itself with commerce, but rather with dwelling and space. Urban development concerns itself with commerce and so requires and demands the inputs to make the engine run (people). Residents are the most stable inputs.

DenverPoke
04-15-2016, 12:53 PM
Millennials want to be in urban environments close to amenities. Until that changes pretty much every city of significance is going to keep adding downtown units. Heck, pretty much not a week goes by here in Denver that someone isn't proposing another apartment building of varying size.

jerrywall
04-15-2016, 02:03 PM
Why are apartments valued downtown and despised (fought against) on the edges?

In addition to what some folks said... the apartments that are built downtown tend to be much higher quality than the ones build in suburbia.

bchris02
04-15-2016, 03:53 PM
I think OKC is still a ways off from finding equillibrium between supply and demand when it comes to downtown housing units. People need to remember that this city started out far behind most of its peers in terms of downtown living options. Ten years ago, even if you wanted to live downtown there weren't very many options period. You also didn't want to live in many of the inner core neighborhoods because they were still dilapidated. People had no choice but to live in the burbs. It's amazing how much has changed just in the past five years. I think the existing rate of construction could continue for another 10-15 years and supply would just be catching up with demand.