Multifamily buildings are making a comeback in the housing market. Not everyone is interested in living in the suburbs or homes, and the city life attracts buyers of all ages. This has helped revive the multifamily complex market and increase its standard of living.
What are Multifamily Buildings?
Multifamily buildings are housing complexes that range from apartments to condominiums to multi-use buildings that are a mix of living spaces, offices, and commercial flats. These complexes are often supplemented with amenities that simplify lifestyles and provide luxuries that aren’t always available to homeowners.
Luxury communities have become more popular, especially with these multifamily buildings enhancing apartment and condo living in spectacular ways. In June of 2017, the 392-unit community Town Southern paid $52 million for construction financing in Royal Palm Beach. Town Southern has one, two, and three bedroom high-end floor plans with stellar luxuries. They are building a private theater, outdoor billiard space, swimming pool, steam room, and a conference room with high-speed WiFi. They’re also providing a variety of sports and exercise facilities, including a putting green, tennis court, volleyball court, bocce court, yoga and virtual spinning room, and a 24-hour fitness center. Town Southern chose Palm Beach because of its high standard of living, diverse employment options, and job growth. With construction to be finished in 2018, Palm Beach will gain another high-quality multifamily complex to its community.
The Benefits of Condos
Most people are familiar with the benefits of living in an apartment: on-call maintenance, not having to maintain outside property, and less living space to clean and maintain. However, there are major drawbacks as well: no building equity, you don’t actually own your living space, and restrictions on renovations and improvement projects.
Condominiums, on the other hand, supply all the benefits of apartments as well as negate the cons. You actually own your condo, meaning you are building equity and have the final say in additions, upgrading kitchen appliances, decor, and renovations. You may also have more community amenities, especially in luxury condominiums, than an average apartment complex. These can range from a theater room, better-equipped gym, nicer swimming pool, and a party room.
There are multiple benefits to actually owning property. As property values rise, you can sell it and make money if you choose to relocate. If you decide to stay, your condo will continue to increase in value. And while appreciation doesn’t increase as much as it would for a home, owning a condo is significantly less expensive than owning a home. It is also more beneficial than simply renting each month. You can also claim tax deductions for property taxes and mortgage interest, which isn’t an option for apartment renters.
Multifamily Building Sales
Between 2013-2015 in Palm Beach, Florida, the median property value jumped $53,000, according to DATA USA. With the trend still continuing, bizjournals.com reported that sales of non-foreclosure homes were up almost 14 percent in 2016. Non-foreclosure multifamily buildings, such as condos and townhomes, were up more than 5 percent.
Just recently, The Real Deal reported that June’s sale of luxury tower Amary Las Olas in downtown Fort Lauderdale was the highest price per unit sale in the history of Southeast United States. Amary Las Olas sold for $133.55 million, with each apartment totally at nearly $526,000. It was the second highest sale in 2016-2017, and it proved that a slight decline in 2016 sales was back to normal.
The Real Deal also reported a more average number of per price apartment sales. According to Joel Altman of Altman Companies, “The normal rate is around $250,000 per unit.” He explains that this is a result of the high demand of high-class properties in comparison to the current supply, which Town Southern aims to increase.
For multifamily complexes or units that aren’t for sale, this sales increase affects rent. Rent in South Florida has experienced record pricing for six straight years. In addition, income levels have grown as well, the median salary rising 3.6 percent in 2016. According to Cushman, rent rose 32 percent in Miami-Dade, Broward, and Palm Beach, and the occupancy rate remains high, currently at 96 percent. This growth is increasing the value of these multifamily living spaces and thus the market.
Hurricane Impact on Multifamily Buildings in Florida
September’s Hurricane Irma did cause turbulence in the buyers market in Florida. However, lenders are requiring re-inspections to ensure that properties are marketable and intact. If you’re already considering a specific property, your lender should let you know if it’s still safe to purchase. And while the deadly storm may have caused a hiccup in the market, new buyers are still taking the place of frightened ones, and the hiccup is smoothing over. Long-term, Hurricane Irma has proven that the residents in Palm Beach and its surrounding Florida communities are there for each other: to serve, help, and assist neighbors and those in need. It’s a community worth living in.
Multifamily buildings, especially condos and apartments, have benefits to withstand natural disasters. Due to recent weather events in the past month, the nation is preparing itself for more turbulent weather. Future buyers are more aware of the impact regular weather patterns and changes may have on their property and lives. However, multifamily housing is easier to prepare against natural disasters as you have fewer windows to cover and little to no property to clear. Cleaning up after heavy winds and rains is also much faster. Additionally, insuring your property against these disasters is more affordable.
We Can Help
Multifamily housing sales have grown in the past few years. Currently, the market is still hot due to the various benefits to apartment complexes and condominiums. If you prefer the lifestyle of a luxury community or even a more simple community, multifamily buildings are a great option. They provide accommodations that you need for your daily lives and future. If you’re looking to buy, sell, or rent, Scott Gordon Realty in Palm Beach can help.