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Email- Mortgage Rates - Falling mortgage rates over the last 6 years have created a tremendous boom in for-sale housing.
- Lack of Construction - Apartment developers became condo developers because it made more financial sense.
- Condo Conversions - Condo conversions also took apartment units out of the market.
- Rising Homeownership - Despite the fact that many homes that were intended to be owner-occupied are now owned by investors who are renting them out, the nation's rental stock has dwindled. Demographics favor for-sale housing (yes, even with the coming surge in Echo Boomers), but not enough to justify the complete lack of apartment construction that has occurred over the last several years.
The following interesting information on condominium conversions was provided by RealFacts, an apartment market research firm.
Overall, looking at the institutional-quality apartment complexes in the RealFacts database across 15 states, 222 communities converted (2.0% of the database communities total), including 60,122 units (2.16% of the database units total), during 2005. The major states were as follows:
- California - 80 communities (2.16%) with 17,177 units (2.25%) converted. San Diego County accounted for 25% of the total conversions in California, and another 41% were in Northern California.
- Florida - 72 communities (9.78%) converted, and the unit total is an even larger percentage: 10.38% (24,736 units).
- Arizona - 29 communities (3.33%) and 6,696 units (2.92%) converted.
- Nevada - 21 communities (4.90%) and 8,167 units (6.58%) converted.
- Texas - Only 6 communities (0.19%) and 1,114 units (0.13%) converted. This figure is even lower than Indiana!
