The flurry of luxury apartments going up in downtown Madison is bringing up another interesting issue: What about people looking to buy rather than rent?
Local Realtor Liz Lauer is cheering the number of new apartment projects that have come in the market over the past several years. Like the downtown condo boom of a decade ago, she says it’s helping to put more people on the street after work, boosting commercial activity and generating more restaurant and nightlife activity.
“This all has helped to create a city life to build on and the apartment boom is part of that growth that will help ensure vibrant commerce,” Lauer said when commenting on our Wednesday cover story “Boom town.”
But Lauer also notes the lack of owner-occupied options in the downtown today, a curious development given the glut of condos just a few years ago when the housing market went bust.
“The condo inventory in downtown is low and people are also looking to purchase and having a more difficult time finding options,” she says.
Lauer says there is a decided lack of condo units downtown in the $200,000 to $300,000 range, in part because existing units at Capitol West, Metropolitan Place II and The Loraine have been selling so well as the housing market recovers.
As it stands, a total of 1,471 new apartment units have been added the core downtown since 2010, according to the most recent accounting from the city planning department. (See attached document)
About the only new condos in the works that come to mind are the 45 units on East Mifflin Street planned for phase 2 of the Gebhardt Development on the 800 block of East Washington in 2015 or later.
One potential outcome is that some of the new apartments coming on line might be converted into owner-occupied condos.
If so, it would mark a complete reversal from 10 years ago when landlords were scrambling to convert apartments into condos to take advantage of a seller’s market for homes.
The glut of apartments could also eventually start to drive down rents in the central city. Right now, there are waiting lists at some of the new buildings but that could change with 1,000 or more new units in the works.