- Dennis Norman
According to a report just released by MyNewPlace.com , as a result of the bad economy, renters around the nation are saving money on their monthly housing costs by sharing apartments with roommates rather than opting for living alone in a one bedroom apartment. As a result, demand for 3 bedroom apartments has been on the rise and, while the largest demand is still for 2 bedroom units, the gap is narrowing between demand for 2 and 3 bedroom apartments.
Whether this is a temporary situation or in fact a market niche worth exploring by investors is a question, but may be worth looking into. While this study was about apartments I think the same thoughts could be applied to homes as well. Not all 3 bedroom homes (or apartments for that matter) are created equal when it comes to roommates so keeping this in mind when acquiring homes or apartments may help your homes and apartments appeal to more prospective tenants.
Based on a sample of nearly 10 million searches for 1-, 2-, and 3-bedroom apartments that took place on MyNewPlace.combetween January 2008 and June 2009, the percentage of searches for 3-bedroom apartments consistently increased each quarter while searches for 1-bedroom apartments decreased. The share of searches for 2-bedroom apartments meanwhile stayed steady, suggesting that instead of ‘doubling up,’ renters are tripling up for even greater rent savings.
According to the survey, the top ten cities for roomates looking to save on housing are:
- Washington, DC: Not surprisingly, the cities with the highest rents often offer the highest potential for savings. The share of 3-bedroom searches in the area around the nation’s capital has grown by 87%, with renters saving as much as $800/month by bunking up—nearly $10,000 per year.
- Philadelphia: Faced with high housing costs, renters in the City of Brotherly Love are getting friendlier than ever, with searches for 3-bedroom apartments more than doubling, with average savings of around $490 per month.
- Atlanta: Atlanta saw 1-bedroom searches decline by half and 3-bedroom searches more than double, as eager renters pursued $413/month savings by moving in with roommates.
- San Jose: Silicon Valley renters sought to mitigate the area’s notoriously expensive rents by finding roommates—at a savings of more than $600/month.
- Chicago: Windy City residents braced against the chilly economic climate by cozying up with roommates, doubling up their 3-bedroom searches, to the tune of $560/month savings.
- Denver: Renters are tripling up in the Mile High City at some of the highest rates in the country, and saving nearly $350/month in the process.
- Los Angeles: In the City of Angels, even the beautiful people are moving in together. Three beautiful people under one roof could save more than $525 each.
- Seattle: 3-bedroom search share increased 113% from January 2008 to June 2009, with savings of up to $500/month for each roommate. That’s a lot of cups of coffee.
- Las Vegas: Nevadans aren’t gambling when it comes to their housing costs. Las Vegas has among the highest growth in 3-bedroom searches nationwide, and each roommate could be saving $360/month.
- Boston & Cambridge: Renters in the Boston area aren’t tripling up at quite the rates of the rest of the cities on our list, but they should be—there’s up $880/month to be saved.
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[...] The share of 3-bedroom searches in the area around the Washington DC grew by 87% as more people bunk with roommates to reduce the high cost of living — a rising trend across the country, according a study by MyNewPlace.com [...]