Apartments and condos are more popular than ever, thanks to changing demographics and the lingering fallout from the downturn in the housing market.
Construction of apartments and condos are at their highest levels across the country since the National Association of Home Builders started its Multifamily Production Index in 2003.
According to McGraw Hill Construction, which studies building markets, multi-family construction hit its lowest level in 50 years between 2006 and 2009. In 2011, the market grew 34 percent and grew another 19 percent in 2012. The firm estimates the market to grow 14 percent this year.
Multiple apartment and condo developments are going up across the New North with projects not only in growing areas such as Appleton’s east and north sides, but also in central city areas, with projects being considered in the downtowns of Appleton, Oshkosh and Green Bay.
Pete Moegenburg of Moegenburg Research, Inc. in Brookfield says across Wisconsin – as well as the surrounding states where his company does commercial appraisals and consulting – more consumers than ever are opting for apartments or condos.
“For a number of reasons, people are shying away from home ownership,” says Moegenburg, adding that people of different ages have different reasons for picking condos and apartments.
“For people over the age of 55, they are looking for ease of living. They don’t want to worry any more about home or yard maintenance. They are choosing properties that are very close to what their homes were like, only on a smaller scale.”
That’s something Greg Drusch, marketing manager for Cypress Homes in Appleton, has seen. The construction company not only builds single family homes, but also freestanding condo units. Those standalone units are a hit with condo buyers, he adds.
“It’s just like having your own house except you don’t need to worry about cutting the lawn or taking care of the snow,” he says. “People like knowing there is someone there who will take care of these chores or they like knowing they can go away for a month or two and everything will be taken care of with their home.”
If it’s a unit still under construction, Cypress works with the condo buyers on picking the finishes they want, such as stainless steel appliances, hardwood floors and granite countertops. As for the typical buyer, Drusch says it could be an individual or couple over age 55 looking to downsize or a busy professional who doesn’t want to worry about maintenance work.
For young professionals, picking a condo or apartment over a home may be simple economics, Moegenburg says. “They might not have a lot of faith in the housing market or with tighter lending practices, it’s now more difficult to buy a home and they may not have the money for a down payment or to get the home with the amenities they want,” he says.
That demand means developers are focused more on multi-family developments. “You just don’t want to put up a complex out on a piece of property you have out in Greenville because you want something to go on it. There is a demand out there. The key is to study the market and make sure you are putting up a project with a demand built in,” Moegenburg says.
For example, as more employers move workers to downtown Green Bay, the city has seen a jump in the number of developers looking at downtown housing projects. They know employees will be looking for somewhere to live and more people than ever are interested in a development’s walkability or how close it is to stores, employers and entertainment.
“A lot of communities are trying to distinguish themselves by not only offering spaces with great finishes, but also amenities like a clubhouse or some other area that fosters community,” Moegenburg says. “Walkability is a big one and some projects even tout that in their marketing. You can live here and walk to get coffee, go to church, shop and more.”
The housing market also has more players than before as developers who previously focused just on retail and restaurant space realize that area isn’t growing as quickly as housing. “There’s a lot of new housing products out there now and a lot of variety for people to choose from,” Moegenburg says. “Just like Darwin said, it’s the survival of the fittest and developers with a certain level of sophistication will succeed in the housing market.”
Projects near you
There are several multi-family projects moving through the approval process or under construction in the region:
Oshkosh River Development LLC partners Andy Dumke and Cal Schultz are looking to add 80 riverfront apartments in downtown Oshkosh next to The Rivers, a senior living facility. The proposed $5.2 million project, which is going through city and financing approvals, would include 80 units targeted at young professionals.
There are several proposals on the table for housing in downtown Green Bay, from affordable housing projects to ones offering more upscale units. A $10 million, 84-unit apartment building planned for the corner of Main and North Washington streets along the Fox River is the one closest to breaking ground. Just last month, developer T. Wall Enterprises of Middleton was able to secure the final pieces of its financing puzzle.
In Appleton, construction crews are working on RiverHeath, a 36-unit apartment complex along the Fox River in the shadows of the College Avenue Bridge. Tenants could begin moving in next summer.