The expectation of a huge boom in apartment construction in the next year or two has County Appraiser Paul Welcome wondering whether future housing of choice in the county will look radically different from the stereotypical suburban house and two-car garage.
Welcome reported a “humongous expansion phase” in apartment building in his annual revaluation report to the county commission last week. Some 11,000 apartments have either been announced or are in the process of being built, Welcome said, a major increase from the 2,000 apartments per year that were being built in peak times.
The numbers caused Welcome to consider how the future balance of single-family versus apartment dwellings might look. “The new millennial generation, are they going to be moving into apartments and are we going to be building less single-family residences?” he said.
“You’ve got to remember the millennials saw their parents lose all their wealth when they had their houses foreclosed on,” Welcome said. “So are they saying, ‘I want to be more mobile and I want to live in a facility where I can pack up and leave any time and not have any investment in it.’? I don’t know the answer to that, but there does seem to be some type of shift going on in that area.”
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He added that so far strong rents and low vacancies seem to support the developers’ enthusiasm for apartments. Time will tell how many of the 11,000 apartments planned will actually be built, he said. In the meantime, 1,751 units were built last year — about the same as in 2013.
Welcome’s report had good news for the rest of the real estate market in the county as well. Residential building has returned to levels of around 2006, just before the recession hit, he said.
Existing property values have also increased. Welcome said about 91 percent of the county’s residential property owners will see an increase in value, with only 7.3 percent seeing a decrease. Just three or four years ago, those numbers were reversed, Welcome said.
The average selling price for new and existing homes has increased steadily from a low in 2009 and 2010, according to the appraiser’s report. Last year the sales price of new homes was around $440,000 and existing homes $272,000, and both of those amounts are up from 2013 when they were $403,000 and $264,000, respectively.
The report showed that the value of existing homes is increasing all over the county, but more in some parts. The parts of the county with the most of the increase in value were in the far southeast and southwest corners, including much of Olathe. Those areas saw an increase of more than 5 percent over the previous year. The area with the lowest increase in value was a block identified by Welcome as Merriam, which saw a 1 to 2 percent increase. Areas just to the west and south of Merriam had increases in value of 4 percent or higher.
Industrial construction has also seen a huge spike, due to the intermodal freight facility being built near Edgerton, Welcome said. Last year 2.3 million square feet of industrial space was built, compared to 1.2 million in 2013 and 93,000 in the recession year of 2010.
“I think this is a new norm, a norm that’s going to blow your ideas of how much industrial space we will be building,” he told commissioners. That new normal could last the next 10 to 15 years if the intermodal is built out to 30 million square feet, he said.