Dallas home prices continue to soar, while rent prices are softening, prompting more and more apartment-dwellers to stay put.
Dallas Renters hottest neighborhoods may finally get some much-needed relief. Developers continue to flock to hot neighborhoods in Downtown/Uptown to Addison. In fact, these neighborhoods comprise about half of the 10,000 new units expected to deliver in the Dallas metro area in 2015. However, the pace of new supply is beginning to outpace demand, and competition for tenants is heating up. Because of this, vacancy rates in Downtown/Uptown and Addison shot up by 10.2 percent and 9.3 percent year over year, respectively. Meanwhile, rent prices in these neighborhoods have increased by only 3 percent and 2 percent, respectively — far below the citywide average increase of 6 percent. For bargain hunters, move-in incentives are on the rebound as well. In Downtown/Uptown and Addison, 60 percent of apartments built since 2014 are offering prospective residents one-month of free rent on at least one floor plan. Stiff competition is forcing developers to get creative and triggering a spike in studio construction. In the frenzy of new supply, developers have been upping the ante on amenities in order to set their properties apart from ever-growing competition. Anyone who’s seen Uptown’s terraced infinity pool with views of the Rockies and the downtown skyline can attest to this. But with affordability becoming a growing concern, some developers are taking a different approach. Taylor Residential at RiNo building is on track to be completed by mid-2016, and more than half of its 270 units will be studios, targeting 20-somethings who would otherwise be priced out of new buildings in the Downtown area. RMM & Taylor partnership’s conversion of the former VQ Hotel in West Dallas is set to open this Fall and employs a similar strategy — 168 of the building’s 179 units will be 339-square foot studios. The mere size of these units is representative of yet another trend emerging both in Dallas and nationwide. Not only are developers building more studios than ever before; they’re also making them smaller. By shifting their focus to studio construction, and building smaller, more creatively-spaced units, developers are able to provide prospective renters with the location and building attributes they want, at a price they can better afford.
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