Increased Housing Prices

Housing Prices Increasing

By: Nicole Galonczyk

Bethany Humphrey is one of 4,970 freshmen students who will be moving out of her dorm and into a new house or apartment. Over the years, housing in Athens is slowly increasing, a problem that Humphrey is experiencing firsthand.

This year, many apartment complexes in prime locations are raising their rent prices due to a number of factors while other apartment complexes further from campus are keeping rent prices constant or slowly increasing them.

Humphrey, a freshman majoring in pre-journalism from Carrolton, Ga., feels the effects of the market as she searches for her first college apartment.

“My older sister is a junior and lives in Steeplechase and her apartment was $290 before utilities,” Humphrey said. “The one I was looking at downtown was $500 without utilities – that’s so much.”

The pre-journalism major currently resides in Russell Hall which costs $4,904 for the academic school year and around $545 per month. Comparing her rent in the dorms to the downtown apartment she was looking at without utilities, the cost of on-campus housing is about the same price as living in an apartment near downtown.

Russell Hall and the freshmen residence halls nearby on west campus are dorms where the cost of living is comparable to an apartment downtown. However, the residence halls on east campus are the most expensive for the freshmen and upperclassmen that live there. These dorms cost $7,796 for an academic year and summer, roughly around 11.5 months. Rent on this side of campus is $678 per month, exceeding the cost of rent at many apartment complexes and rental houses.

Realtor Melinda McCausland of Benny Payne Realty has been in the real estate business for 20 years and has watched different market trends in the Athens-Clarke county area. She says that housing prices are no longer decreasing, but are slowly increasing.

“There are still a lot of foreclosures on the market since people are more willing to give up investment properties rather than their homes,” McCausland said. “We still see a lot of condos in foreclosure [in Athens], but the market isn’t as down as it used to be.”

McCausland says that for some individuals it’s hard to receive financing in order to put money down on a rental property. She also says that apartment complexes struggle to obtain financing because properties must have 51 percent owner occupancy in order to be eligible.

“Lenders are tight on financing and are more worried about the housing market coming back than the market for condos,” McCausland said.

The realtor says that apartment complexes are simply raising rental prices “because they can” and since students must have housing, the prices aren’t stopping them or their parents from renting.

She attributes the increased rental costs to apartment complexes that are in popular locations such as downtown and locations within walking distance to campus.

McCausland has noted a trend in student housing and says that ever since the financial downturn more students are renting foreclosures because they’re cheaper and easier to rent.

Brandy Duckworth, property manager of Towneclub Condominiums located off of Milledge Avenue, credits increased rental prices to the market value of apartments in the area.

“Not every student can fork out a lot of money to spend on an apartment and we don’t increase prices every year, but when we have to we have reasons and have to keep up with the market value,” Duckworth said.

Duckworth said she receives calls from market researchers and building developers who plan to add more housing nearby.

Because the recently released market survey showed that Towneclub was actually one of the properties that was below market value, Duckworth said that Club properties had to increase its rent.

In a New York Times article from September 2012, Patrick Newport of IHS Global Insight, a private research firm, says that lower-priced homes and rentals are rising slightly faster in market value as opposed to homes in the middle and upper tiers.

Newport’s findings can be recognized in the local housing market, especially in popular locations.

The researcher found that a lower-priced home rose at an annual rate of 1 percent on a seasonally adjusted basis, while the upper tier homes increased only by .01 percent.

Long Range Planner for Athens-Clarke County Gavin Hassemer partly credits the price of gas and transportation for the rise of luxury apartments downtown, like the newly constructed Flats at Carrs Mill.

 “Even though downtown apartments are closer and more expensive than those on the outside of town, when you factor in gas mileage to get from downtown Athens to the perimeter versus being able to walk from downtown, it [housing prices] may actually balance itself out,” Hassemer said.

Apartment complexes further from campus have also increased slowly in their rental prices. The U Apartments, located past the Athens perimeter, has noted the market value of other locations nearby and adjusted its prices to match competitors.

Last year, a 4 bedroom apartment cost $395 and a 2 bedroom suite was $455. Now, the rent is $10 extra per month because of new appliances and amenities in the apartment community.

A leasing consultant with the apartment complex said that they've increased their rent in order to stay competitive with other apartments near the Athens perimeter. They've also increased their rent to make sure they're receiving the same price per square footage as other apartments.

The long range planner also attributes trends to being part of the increased housing prices. Hassemer said that 20 years ago there used to be more apartments downtown, but then “shinier, nicer ones popped up on the east and west side.” He believes that trend is gone, since now students want to be closer to downtown.

Hassemer said students can expect price increases at complexes near streets and locations that have access to transportation.

“Milledge is very popular because it has a bus route and sidewalks for good portions of the road,” he said. “It’s also a main thoroughfare that everyone knows due to its restaurants, office and medical locations.”

For older apartments, it’s going to take remodeling or some type of amenity that isn’t offered downtown. Hassemer said that older complexes should remodel or else they won’t be able to retain their renters and they’ll be forced to shut down.

"Students focus more on housing downtown because it's shinier and new. I don't blame them; I'd want to live downtown too."

Edited by: Taylor Knowles

Brandy Duckworth, leasing manager of Towneclub Condominiums attributes increased rental prices to the market value of other apartment complexes in Athens