The scenery in Bryan/College Station is changing by the day, new houses, condominiums and apartment complexes are going up everywhere you look. Is there enough demand to warrant the supply or will this building boom, soon be a bust?
"We are still going to see relatively strong construction for the next year or two," said James Gaines, research economist, Texas A&M Real Estate Center.
Gaines says while there is a lot of construction going on, there isn't a housing bubble. He says the local market is catching up to itself.
"Real estate markets are generally cyclical, they go up they go down, they go from boom to bust to boom to bust," said Gaines.
But Gaines warns, just because there is no bubble does not mean we won't see some changes in the marketplace, especially when it comes to rental property. Newer apartments and duplexes operate at about a 90 percent occupancy rate, which Gaines says is pretty good. Older properties operate at about a 75 to 80 percent occupancy rate. With five new multi unit construction projects in College Station and three in Bryan what's going to happen to those older units?
"What we'll see is a combination of rents stabilizing, not going up and will also see those vacancy numbers not get any better," said Gaines.
Keith Clements owns equity real estate, a company that handles everything from property management, to property sales and apartment locating. He says the rental market is definitely changing.
"We do see some of the older properties rents coming down, but most of the properties that are student oriented are either increasing or staying flat," said Keith Clements, Equity Real Estate.
But staying flat isn't a good thing, Clements says property managers are going to have to step up their service if they want to keep units full.
"We've got to provide a better service, years ago we used to be able to rent just anything for over $1000, now it's a little bit tougher," said Clements.
And it isn't going to get easier. Gaines says once the new construction projects are complete, the older properties will start feeling the competition.
"They'll either go out of the marketplace or they'll have to reposition themselves marketwise. Either they'll have to become the low income alternative or they'll have to do something else, remodel," said Gaines.
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