Buyers' market in apartment living Ameniti, quality, even free rent available in a choosy atmosphere

October 16, 1991|By Karen Harrop

Consumers of the '90s are looking for the biggest bang for their bucks. In everything from clothes to cars to homes, they are demanding quality products and services for the best price.

In the same vein, many men and women who choose apartment life want the look and feel of their own home without the hassle of owning, and in today's market they can afford to be choosy. As well as providing such amenities as 24-hour maintenance and updated appliances, many apartment complexes are offering incentives of one or two months of free rent or reduced or no security deposits.

"People want value for their money, whether they're looking at a car or an apartment; they're very careful what they spend it on," says Nancy Okula, assistant resident manager with Questar Management. "We provide a number of amenities to make our residents feel comfortable and more at home."

"To attract renters you have to know what renters are looking for and then have the ability to respond. . . . And in the '90s, we anticipate they want more services or added value for their dollar," says Charles Dukes of Charles Dukes & Associates, spokesman for City Wide Management Co.

"Since we own the properties [that we manage] we go to great lengths to keep properties maintained regularly inside and outside, whether it has meant updating redecorating, landscaping or providing a porter [to assist tenants with packages and small services]."

Lynn Kahlenberg, property manager with the Brodie Organization, agrees. "Our residents want a nice place to live without having to deal with problems when they come home. They want someone seven days a week that they can talk to if they have a problem, and that's why we have an on-call maintenance department."

Clearly, service lies near the top of the list in importance for good manager-resident relations; all the property management experts interviewed stressed the importance of service and convenience for their residents.

But what services exactly do people want, and is this really a new trend?

"People want quality at a reasonable price, professional management, prompt maintenance, and curb appeal" --

well-maintained grounds and exteriors, says John P. Martonick, immediate past president of the Apartment Builders and Owners Council of the Home Builders Association of Maryland. "Things like washers and dryers are important, but they are not deal makers or breakers for most people."

He adds, "People are demanding the same things today as 10 years ago, but because of the market, management companies are paying more attention now. Consumers are much more attuned to what's available and are very conscious of the amount of money they are spending for services."

Part of the push for more services at a reasonable cost is the new '90s mentality of quality and economy, but the strongest force driving the increasing demand for services probably is the current recession and the resultant market in home buying and apartment renting.

Property management professionals have labeled the current market everything from soft to strange to stable. And the reasons they give as being behind the unusual market are almost as varied.

"The market is extremely soft at the moment, with vacancies being double or triple that of the last 10 years," says Mr. Martonick. "Normally, apartments experience a 2- to 4-percent vacancy [rate], which is manageable, but now some properties are having 12 percent and higher vacancies, which causes serious concerns."

Mr. Martonick attributes the increasing vacancies to several things. One, people are taking advantage of the current low interest rates to purchase their first home. Second, the apartment market is saturated, with more apartments than people to rent them, and with the recession, many people are remaining in smaller apartments rather than upgrading. Third, local employers are not bringing in new people, who tend to rent for a while before purchasing a home.

"It's a strange market right now," says R. Bruce Campbell, president of Wallace H. Campbell and Co. "Some communities have under 5 percent vacancies, while others are pushing 10 percent or more. And some go as high as 12 to 13 percent."

A general rule of thumb for vacancies in an area is 1 percent vacancy for every page of ads in the newspaper. "And there are a lot of big ads [in the Sunday paper] these days, about eight pages if you count the small ads," Mr. Campbell says.

But, he says, there's no simple explanation for the vacancies, as communities with higher vacancies are not in any particular area or income range. In the general market, he believes, a number of people are living at home or sharing apartments to cut costs. The cost savings between sharing a two-bedroom $600 apartment and having a $450 one-bedroom is a significant one for most people. In addition, condominiums are becoming more and more affordable, and with low interest rates, they're a big competition for apartment communities.

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