January 14, 2000

Why buy when you can rent?

By TOM KELLY
The Real Estate Advisor

The oven didn't work, so the barbecue got a workout. The sofa had no casters and was supported by old paperbacks the owners hadn’t cracked in months. Shelves were composed of red bricks and any available wood planks.

Mattresses and box springs neither matched nor were afforded the luxury of a frame. There were always dirty rugby shoes outside the front door and rarely anything more than milk, bologna and beer in the refrigerator.

One year out of college and it was home - for $200 a month, split four ways. The stucco duplex boasted two bedrooms, one bath, a tiny den, fireplace, garage and kitchen with eating space. It was less than a nine-iron shot from a regional mall. And, to top things off, the neighbors were our best friends, which was probably worth more than the monthly rent in memorable times and telephone complaints not received.

Twenty-seven years ago, it seemed all renters were not far from our situation and were separated only by age. Young, old, families, virtually all ethnic groups, living month-to-month with years of saving ahead before even the glimmer of home ownership could enter the picture.

Now, things have changed. While the traditional renter of years ago still is part of the puzzle, there is a growing number of people who definitely have the means to own yet choose to rent. In fact, some are simply too busy to simply shop for a house. Who, exactly, is the Millennial renter?

The new century will find an increasing number of renters leaving behind the suburbs for a renewed interest in downtown living, according to a new study released by the Institute of Real Estate Management.

E. Craig Suhrbier, national IREM president elect and president of Suhrco Management, Inc., in Bellevue, said demand for apartments will come from two growing, yet untraditional, avenues. They were the highlights of "Income/Expense Analysis: Conventional Apartments" published by IREM, a professional organization advocating competence in real estate management.

Aging baby boomers are becoming empty nesters and no longer need a single-family home in the suburbs. Lifestyle and ease of access to urban amenities are playing a bigger role in the decision to rent.

In addition, many Generation Xers and their younger counterparts, the Gen Yers, have little interest in living the lifestyle of their parents. For them, access to recreational, entertainment and a more hip lifestyle are a reflection of the ideas that a downtown lifestyle is desired by their generation.

"To attract this new breed of lifestyle seeking, time-crunched apartment renter, owners and managers will do well to consider offering expensive, state-of-the-art exercise rooms, yoga classes, spirit rooms and health-related programs," Suhrbier said.

The apartment renter of tomorrow will seek out living environments that reflect a greater concern for personal safety and which provide more choice in amenities and conveniences that leave more time for personal interests, the report stated.

According to Ron Witten, president of M/PF Research, the number of first-time renters will grow for the first time in two decades.

"The children of the baby boom will give developers the opportunity to create products that combine affordability, high technology and a return to the clubhouse/social center amenities popular in the 1970s," Witten said.

Suhrbier, a Seattle native, was educated at the University of Washington and has been active in Suhrco, a family-run company, for 17 years. The company oversees a real estate portfolio of 9 million square feet throughout the state, including office buildings, apartment communities, retail centers, corporate facilities, distribution centers, mini-warehouses and condominiums.

"The Seattle and Bellevue cores will remain a strong market for renters, yet some of the outside areas of Snohomish, Kitsap and Pierce counties will start to experience some softening," Suhrbier said. "I think you’ll see a trend toward urban villages in order for families to afford the suburbs."

According to Suhrbier, some of the new apartment buildings coming on the scene in the Puget Sound area will be as slick and high-tech as any now available. It’s interesting that the aging baby boomers, along with recent high school and college graduates, are all seeking the latest wiring to accommodate high-speed computer programs and options. Super swift broadband used to access Internet audio and video programming, will soon be as common as the telephone, and property managers will be able to tell if the oven is working in a particular unit by simply turning on a computer in their office.

That would have saved us a lot of charcoal and lighter fluid.

Previous columns:

• One analyst can move mountains, mortgages, 01-07-2000
• A look at house of tomorrow, 12-23-1999
• Home for holidays has a new meaning, 12-17-1999
• Buying and selling over the holidays, 12-10-1999
• New loan removes need to refinance, 12-03-1999
• Scenes from the NAR expo, 11-25-1999
• A look at the future of housing, 11-19-1999
• Your guide to mortgage insurance, 11-05-1999