I get a lot of sale flyers by email from all of the brokerage firms. I suspect you’re on the same list and have seen a pretty big increase in sale activity. According to Real Capital Analytics there is a pretty substantial uptick in transaction volumes on a year over year basis. What I find interesting is the way the sale flyers have changed over the years. In the 1980s, the average person weighted in at about 160 pounds, at least for air traffic planning purposes. There was that one time I flew on Air Wisconsin (it was a bring your own cheese flight) and they actually got all of the passengers to weigh in before getting on the flight, except for one woman who decided despite outward appearances, that she wasn’t going to comply. The gate agent looked at her—probably all of 100 pounds of her—and said, OK, we’re guessing you’re 120 pounds. She got on the scale.
Now fast forward to 2012 and the average weight of a passenger is much higher than 160 pounds. So the reality is in the 1980s when people weighed less, there were no swimming pool photos in brochures and now that they weight a lot more, there are lots of swimming pool photos. It seems to me that most of the time, the flyers showing lots of swimming pool photos are equating property value and resident satisfaction with what the pool looks like. From an economist’s perspective, that’s fine, except that the pool is empty in most of the photos. So unless you’re buying an apartment community by the gallon, based on the size of the pool, wouldn’t it make more sense to show the front of the community and the interior of the units? That is, after all where the residents and prospects make their decisions. In the past 10 years, the average unit size has increased slightly and the unit mix has changed over what was the traditional way of developing the tiers in each section. A closer examination of the data would most assuredly demonstrate that the unit sizes, according to building age and structure purpose are affected by urban/suburban and market rate/subsidized target renter. The forecast for this year isn’t much different from what has been built in the past, and unit sizes, somewhat stable for a while now may end up slightly smaller and utilitarian. Enter the beginning of more zero edge pools and hopefully better brochure photographs. If you’re not spending much time in the apartment, at least the outside will be more inviting. I hope to see you in the pool.
Jack Kern is the research editor for Multihousing News and Commercial Property Executive magazines. When he’s not hanging out in apartment pools (mostly uninvited) you can find him at [email protected].