Charleston area to see the development of homes for rent | Business
MONCKS CORNER – A rental construction development – one of the latest trends in the booming US real estate market – is coming to Berkeley County.
Harmon Foxbank, a community of 109 single-family townhomes, broke new ground this week at Foxbank Plantation, south of downtown Moncks Corner, along US Highway 52.
It’s believed to be the first construction community for rent in the Charleston market, and it’s a trend many real estate experts expect to become mainstream as house prices continue to rise. sharply.
“Home prices in the Charleston area are so expensive that people are forced to rent nowadays,” said Elaine Worzala, a former professor of real estate at the College of Charleston who is now at George Washington University. “A house built to rent makes a lot of sense to young couples and baby boomers. For the price of what an apartment would cost, they can get the extra space, the yard, and feel like they are homeowners.
As bond yields remain at historically low levels and inflation rises, more than $ 30 billion of capital has been poured into the national rental housing market as investors aim to build to rent single-family homes and properties. communities.
About 39% of all residential rental properties in the United States are single-family homes – the highest percentage since 1965 – while homeownership is at an all-time low. Nearly 17 million rental housing units are single-family homes today, and an additional 13 million rental households are expected to be formed by 2030, according to the Urban Institute.
The single-family home rental industry has grown into a $ 3 trillion business, with 1 million homes traded between investors each year, according to Roofstock, an online website for investing in single-family rental homes.
In 2017, approximately 37,000 homes were built for rent, according to the National Association of Home Builders. Two years later, the number has climbed to around 43,000. This number is expected to continue to rise in the years to come.
“The rental construction market is exploding and it will continue for the foreseeable future,” said John Kent, a Greenville-based real estate broker at SVN Blackstream. “Rent houses and communities have become very popular in the Sunbelt and the South East as people have migrated from the North. Buildable homes and communities have been around for some time, but the COVID pandemic has only accelerated the process. “
Big home builders like Toll Brothers, which announced a $ 60 million joint venture to form a construction company for lease in 2019, are entering the market. Miami-based Lennar Corp., one of the nation’s largest builders, is also experimenting with the concept.
In mid-October, Crescent Communities and Pretium, a New York-based investment firm, announced the formation of a joint venture to invest $ 1 billion in single-family communities to be built in 14 markets in Southeast and Southeastern Canada. South West. Harmon Foxbank is their first local project.
“There is a huge under-supply of rental housing available in the Sunbelt and the Southeast,” said Tony Chen, general manager of single-family rental housing at Crescent Communities. “As home values appreciate and affordability becomes more of an issue, build-for-rental communities have become an attractive alternative. “
Several factors have played a role in the popularity of the rental construction phenomenon.
- Millennials have kids and they want to raise them in the suburbs, near parks, other kids, and good schools, and they value having a yard.
- Millennials have a high incidence of dog owners, and there are some major benefits to having a yard when you have a dog.
- The need for more space, from a dedicated room to home offices, is pushing some millennials out of apartments and into townhouses or single housing units.
- House prices are getting out of reach for many young families, and renting a townhouse or detached house is often their best option.
But it’s not just millennials who are renters. As the National Multifamily Housing Council reported in 2020, they come from all age groups.
“I can see single-family rentals become as popular as multi-family homes over the next 10 to 20 years,” Dent said.
Worzala sees a downside to the trend.
“I’m worried it could hurt the American dream of owning a home,” said Worzala, who is now a real estate professor and president of the George Washington Center for Real Estate and Urban Analysis. “Most people can’t afford the down payment on a $ 400,000 home. Who saved $ 80,000? Communities and homes built for rental will only continue to drive up home prices. “
With Volvo and Boeing a short drive from Foxbank Plantation, Crescent’s Chen believes the market is ideal for build-to-hire customers.
“If you are an engineer at Volvo or Boeing, you understand that these jobs can be transient as you can move from one factory to another within the company,” Chen said. “If you know you’re going to be living somewhere for two or three years, why put a huge down payment on a house and then have unforeseen maintenance expenses? “
Harmon Foxbank will feature 3- and 4-bedroom townhouses ranging from 1,600 to 2,200 square feet with a detached garage. All residents of Harmon Foxbank will have access to the amenities of Foxbank Plantation, which include a swimming pool, lake, fitness center and dog park.
The townhouses will be managed by Progress Residential, a Charlotte-based property management company.
“I think it gives people confidence that all the maintenance is going to be handled,” Chen said.
The first row houses are expected to be completed by spring 2022.
Chen said Crescent’s next build community for rent is expected to be in Charlotte.
To reach Andrew Miller at 843-937-5599. Follow him on Twitter @APMILLER_PandC