Tuesday, March 31, 2009

Downtown Housing Update

The Partnership for Downtown St. Louis issued its latest report on the downtown housing market. Here is a quick rundown on the report's findings:

  • The downtown population grew over 6% to 11,854 in 2008.
  • The 55-unit Roberts Tower, scheduled to open in 2010, is currently the only condominium property under construction or in development.
  • Of all of Pyramid’s downtown projects under development – The Arcade, The Concord, The Jefferson Arms, The Laurel and the Leather Trades, only the Laurel is currently projected to move forward within the next year.
  • Over 400 apartments were added to the downtown market in 2008, the largest increase in the past ten years with the exception of 2006.
  • This includes nearly 200 units that originally opened as condominiums in 2007 and converted to apartments in the second half of the year.
  • Despite the increase in apartment units, apartment occupancy for properties open a full year actually increased from 88% to 90%.
  • Several developers to have converted unsold inventories of completed condominiums into apartments. This change in use allowed developers to not only adjust to market conditions but also to take financial advantage of Federal Historic Tax Credits (condominium projects do not qualify).
  • The limited supply of new condominiums available means that downtown should be well positioned when the economy recovers and the market for condominiums returns.
  • There will also be a ready inventory of high quality rental units in recently developed properties that are prepared to convert quickly from apartments back to condominiums as the market dictates.
  • The same changes that have corrected a potential oversupply of condominiums could also create a potential short term oversupply of apartments pending development of several large mixed-use projects that have shifted from condo to apartment properties.

2 comments:

Matt Kastner said...

Overall, I would say that the report had no big surprises. I know we're all disappointed that the growth being projected for the next few years is on hold, but at least most of developers were saved from being burned like in so many other cities. In a couple years, the future is going to start looking rosier again.

And 12,000 Downtown residents is quite an improvement from five years ago.

Brian said...

True, and I have to think that as more and more baby boomers hit retirement age and look to downsize, that will only help the condo market. Maybe it will be enough to get bigger projects like The Concord and the Arcade off the ground.

Two things that I found encouraging were that The Laurel project is not dead and that affordable apartments have been very popular - the more pricing options available downtown, the better.