Saturday, May 27, 2017

Here's Why Apartment Sizes Are Rapidly Shrinking

Average apartment sizes have been rapidly and steadily shrinking the past few years. Recent research published by RCLO analyzes the basis for decreasing unit sizes and soaring renting costs.

Boston, in particular, is a city affected by the trend of decreasing unit sizes. Newly built studio and one-bedroom apartments across the country are seeing a decrease in average unit size and an increase in unit quantity.

Studies published by RCLO show that the average unit size between 2010 to 2016 was 917 square feet. The average size of apartment units from 2000 to 2009 was 988 square feet, therefore the average unit size has decreased by 7%. 

Unit size has been drastically decreasing across the country. RCLO studies surveyed the real estate market by region, and found the Midwest to face the largest percentage decrease. Out of the 20 markets studied, the only two markets which saw an increase in average unit size were San Diego, California, and Riverside, California. The rest of the markets analyzed, including Boston, saw an average unit size decrease by a whopping 25%.

What is the reasoning behind this drastic dive in unit sizes? There are several reasons for the decrease, starting with affordability. With rents rising faster than wages, many renters are forced to find more affordable, and less spacious dwellings. Renters are seeking more financial balance in their lives, and are compromising on larger living spaces and excess spending.

Another contributing factor towards the diminishing average unit size is the increasing quantity of studio and one-bedroom apartments, and the shrinking quantity of larger units. Two-bedroom units have been particularly decreasing in quantity, while there has been a heavy emphasis on constructing studio and one-bedroom units. From 2010 to 2016, two-bedroom units accounted for only 35% of newly developed units. This change is likely geared towards the millennial generation. Prime urban location is proving to be highly valuable to millennials, who are sacrificing spacious living spaces for unbeatable locations. By working, living, and socializing in the same area, millennials are saving precious time avoiding a long commute, and bringing more convenience and flexibility to their schedules.

The good news – property developers have been attempting to compensate for the decreasing unit size by providing tenants with more amenities, like gyms, movie theaters, and expansive communal lounges. Unit space may be decreasing in prime Boston locations, however these modern micro-units are providing renters with maximum convenience and deluxe amenities.