The latest movement in condo sales to rentals shows that it doesn't matter what kind of market evolves, someone's going to make some serious money. With very little fanfare, the Joint Centers for Housing Studies of Harvard University released its 2007 State of the Housing report several months ago. Unlike its two predecessor reports in 2005 and 2006, this report received little media attention.

But like they say, the devil's in the details, and this 44-page study lays out where some of the next boom will be in condo sales and rentals. Throughout 2006 and 2007, while sales of condo and other housing units fell, "most of the recent multi-family rental construction offset losses," for developers, according to the Harvard report. Meanwhile, developers have begun to look at this slower market as a time to move toward infill construction in desirable locations outside large cities.

The Chicago-Sun Times writes "amid negative reports, some real estate veterans see opportunity, in a piece titled, "More '08 trends: optimism, green building, boomers."

Developers are moving forward with multi-family rental units. Rick Cavenaugh, president of Chicago-based Fifield Companies was quoted in the Sun Times, saying: "For more and more people, the rent versus buy debate will be pretty simple, and they'll opt to rent for a longer period of time. Thus rental developments will see higher resident retention rates."

So what does that mean to you? Well, guess who owns most of the rental units in America -- individual owners, not the mega corporations. The 2007 Harvard study says in recent years, "Individuals and married couples owned 19.3 million of the nation's rental units, while partnerships, corporations, and other institutions owned another 15.6 million. With more than half of the stock in their hands, smaller owners thus have a significant impact on the direction of the market as a whole."

Published: February 7, 2008

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