Student Housing Crash

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Cyp0111
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7:23p, 7/9/17
I've heard from multiple people that single family and larger apartment complexes are carrying pretty large vacancy rates into the fall. With more product coming online over the next 18 months it seems like the institutional money overshot the market.

Any opinions from the locals?
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BCStalk
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7:28p, 7/9/17
I think we had a large amount of people buying up investment properties for student living and a lot of new apartments. Add to that the numerous ag shacks. I'd say supply past demand awhile back.
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carpe vinum
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7:51p, 7/9/17
AG
It was inevitable. There have been several thousand new units built in just the past few years with more on the way. It makes no sense, but Dr. Gaines offered up that it was Chinese investment that care little about occupancy, and are focused on pure real estate investment gains.
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1.618
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8:00p, 7/9/17
Since both occupancy rates and rental rates drive the value of the real estate, I suppose the Chinese (and other) investors are about to be disappointed. At least it is a good thing for students because their living costs should be stable or even come down as they work toward their degrees.
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AggiePlaya
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8:14p, 7/9/17
AG
Market is saturated
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redd38
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8:33p, 7/9/17
AG
Sounds like we need to increase enrollment /Sharp
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chrisfield
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8:37p, 7/9/17
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AG
This fall's early leasing season should be very, very telling.
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Cyp0111
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9:08p, 7/9/17
Aren't most college places leased up for fall?
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jac4
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In reply to Cyp0111 • 9:27p, 7/9/17
AG
Cyp0111 said:
Aren't most college places leased up for fall?


Some of the newer, fancy ones I drive past have signs that say " immediate move in available."

Those are on Holleman just South of 2818.
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Oogway
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9:34p, 7/9/17
Our neighborhood is single family residential and owner occupied. Some of my neighbors have said their married children are looking to buy their first home so I expect they are hoping some of the investors just sell. It might help drive revitalizing of older neighborhoods if that is the case, perhaps?

Not everyone wants to buy a new home or even a larger home so that might help take a little pressure off the inventory if that were the case?
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chrisfield
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In reply to Cyp0111 • 12:56p, 7/10/17
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AG
Yes, I'm talking about this fall's early leasing season for the 2018-2019 school year. Many students started re-signing or signing new leases in october/november for the following august.
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Cyp0111
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1:07p, 7/10/17
Got it. makes sense. That should be a bloodbath with another 18 story highrise + the new apartment complex going up next to Blackwater Draw on NG.
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StringerBell
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1:43p, 7/10/17
AG
got back to campus last week after a couple of months away and i'm still struck by all the agshacks that are going up. cant for a second imagine there being enough people to fill all of those.
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Cyp0111
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2:42p, 7/10/17
those + new northgate developments + continued townhouse building further out from campus. I imagine we will overshoot considerably and the market will have to reduce rates by ~20% to fill.
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CS78
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2:43p, 7/10/17
The agshacks really aren't a problem for the market. They are nothing compared to the overbuild of dorms/ apartments. The last 8 or so years of new agshacks combined MIGHT equal ONE of the large complexes. The builders/ developers don't care because they are making money up front. The new places will always do well, at first. It's yesterday's new place that gets hit the hardest. The investment companies that own them are not going to let them sit empty. They will start to lower applicant requirements and place less qualified tenants in those rooms before they will let sit at 50% occupancy. This was a problem that could be seen by any idiot years in advance. It was brought to the cities attention numerous times but they just kept approving the building of more apartments. Maybe it's part of their plan to solve "affordable housing" in College Station.
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rc_cat
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3:13p, 7/10/17
I noticed the other day that the Flats on 12/Doux Chene apartments have a sign up touting lower rates. They must be hurting already. And, while I'm at it, other than an obvious attempt to play off the 12th Man, what does "Flats on 12" mean?
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Clo004
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In reply to rc_cat • 3:20p, 7/10/17
Supposedly it came from flat roof buildings on 12 acres. At least that is what a friend of mine told me that worked there for a little bit.
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MsC2012
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3:21p, 7/10/17
AG
Most of the complexes are 75-80% pre leased for the fall. So it's not terrible.
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rc_cat
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In reply to Clo004 • 4:28p, 7/10/17
Clo004 said:
Supposedly it came from flat roof buildings on 12 acres. At least that is what a friend of mine told me that worked there for a little bit.
Ok - never would have made that connection, but if it works for them...
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OneGood2011Ag
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In reply to Clo004 • 4:36p, 7/10/17
AG
Clo004 said:
Supposedly it came from flat roof buildings on 12 acres. At least that is what a friend of mine told me that worked there for a little bit.
According to Brazos CAD, they only have 11.188 acres. Sounds like they need to rename.

(they could be counting the land for Valley View Drive, which runs through the property, when they come up with 12)
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91_Aggie
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In reply to rc_cat • 4:55p, 7/10/17
AG
rc_cat said:
I noticed the other day that the Flats on 12/Doux Chene apartments have a sign up touting lower rates. They must be hurting already. And, while I'm at it, other than an obvious attempt to play off the 12th Man, what does "Flats on 12" mean?
They just need something to erase the stigma of the name Doux Chene.
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oklaunion
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6:22p, 7/10/17
There were some good parties at Doux Chene back in the 70s.
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Frio Cielo
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8:45p, 7/10/17
Many of the newer and larger complexes are owned by national real estate companies who own hundreds of complexes across the country. Although they would like each to be profitable from day !, they look at their investments over a 20 year cycle and also as a capital investment to sell in five to ten years. A decade from now, land close to campus will be worth its weight in gold.

I looked at buying three wood frame homes on Fairview two blocks from campus in 1986. Each was right at $25,000. Now the land alone each are worth about $250,000.
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75AG
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In reply to rc_cat • 7:59a, 7/11/17
AG
rc_cat said:
I noticed the other day that the Flats on 12/Doux Chene apartments have a sign up touting lower rates. They must be hurting already. And, while I'm at it, other than an obvious attempt to play off the 12th Man, what does "Flats on 12" mean?
All I ever see going to the "Flats" are people pushing stolen carts from Walmart. Looks like the place is subsidized housing.
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Fonzie Scheme
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In reply to 75AG • 8:15a, 7/11/17
AG
With potential over-saturation looming, that would seem to be where many of the older complexes on Harvey, Holleman, and SW Parkway are headed. Owners don't care who occupies as long as they get their rent. Same thing happened on the 'B' streets behind Fire Station 2 along Rio Grande. Evacuees from hurricanes moved in and never left. The cops even started calling that area "The Little Easy".
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Cyp0111
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8:21a, 7/11/17
Location will win out. I imagine you will see continued building in Northgate, Century Square due to prime land position. The tertiary properties will have to bring in lower tier renters.

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hopeandrealchange
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8:46a, 7/11/17
As CS78 said. If you have been paying attention you saw this coming years ago. The city of C.S. Is more interested in diversity than the quality of life for our citizens. I shouted this for years. This overbuilding will continue to effect our schools and our crime rate. jmho.
I truly feel sorry for the young investors that are leveraged. This will create a buying opportunity at some point.
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Cyp0111
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In reply to hopeandrealchange • 9:40a, 7/11/17
That can be said for the larger economy in general. Fed policy has pushed people into riskier asset classes in search of yield.
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Thisguy1
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10:16a, 7/11/17
Try buying a house under $200,000 right now in BCS. You better have cash ready because people are paying well over asking and paying cash and they're going right back up as rent houses once everything is closed on it.
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Stupe
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In reply to Thisguy1 • 10:26a, 7/11/17
S
Thisguy1 said:
Try buying a house under $200,000 right now in BCS. You better have cash ready because people are paying well over asking and paying cash and they're going right back up as rent houses once everything is closed on it.
That's exactly what's happening in Edelweiss. There are For Rent signs all over that place and it was primarily owned homes five years ago.
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Thisguy1
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In reply to Stupe • 10:32a, 7/11/17
Stupe said:
Thisguy1 said:
Try buying a house under $200,000 right now in BCS. You better have cash ready because people are paying well over asking and paying cash and they're going right back up as rent houses once everything is closed on it.
That's exactly what's happening in Edelweiss. There are For Rent signs all over that place and it was primarily owned homes five years ago.


It's ridiculous. A 1184 sq/ft house went up for sale for $149,000 in Copperfield a few weeks ago. After a day and a half they got 18 offers and someone got it for $164,000 cash and they paid both sides' closing costs.

Multiple houses we've looked at have gone right back up on Realtor.com in a couple weeks as rent houses.
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Stupe
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In reply to Thisguy1 • 10:42a, 7/11/17
S
That's exactly why we raised our buying ceiling, decided put more down, and looked in areas where people wouldn't be purchasing houses in order to rent them out.
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rhoswen
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In reply to 75AG • 10:43a, 7/11/17
AG
75AG said:
rc_cat said:
I noticed the other day that the Flats on 12/Doux Chene apartments have a sign up touting lower rates. They must be hurting already. And, while I'm at it, other than an obvious attempt to play off the 12th Man, what does "Flats on 12" mean?
All I ever see going to the "Flats" are people pushing stolen carts from Walmart. Looks like the place is subsidized housing.


To be fair, that's what it looked like 20 years ago, too.
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SoTheySay
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In reply to Thisguy1 • 11:08a, 7/11/17
S
This property hasn't closed yet so A. This could change and B. You technically shouldn't know such details.

While the house is small, there is so little in that price range. It's a good neighborhood and a cute house. I'm not surprised.
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Stupe
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11:22a, 7/11/17
S
Why shouldn't he know such details if he's bidding on a house?

If I were in that position and I didn't know what I was bidding against, I would fire my realtor.
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