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article imageAmerica's apartment shortage: Why there isn't enough to go around

By Tucker Cummings     Mar 3, 2012 in Lifestyle
If you've been apartment hunting in the last few months in the U.S., you've probably noticed that many apartments seem overpriced. And with good reason: America is currently experiencing something of an apartment shortage.
According to Slate, "We’re now facing a perfect storm of demand, thanks to a growing population of empty nesters with busted 401(k)s looking to downsize and the huge backlog of twentysomethings who still need their first place."
More and more, Americans are shying away from the housing market, which has been volatile in recent years thanks to the sub-prime mortgage crisis. Rather than risk investing in a home that might lose its value, many Americans feel more secure living in an apartment setting.
And as always in real estate, this crisis is about location, location, location. Some of the metropolitan areas with the fewest available apartments include New York, Portland, Minneapolis, and San Jose. However, regulations in these markets can make it difficult to build new apartments quickly, or at a volume that equals the current demand.
And as demand continues to increase, so will the price of apartment living. According to an article in the Los Angeles Times, 62 percent of residents rent, rather than own. That's a problem, since over 60 percent of those Angelenos who rent their dwellings are classified as "rent burdened," meaning they fork over more than 30 percent of their earnings just to make their rent each month.
But it's not all bad news: a recent article in the Atlanta Journal-Constitution argues that construction will grow as a result of the high demand for new apartments, which is certainly a boon for the economy and the job forecast.
More about America, Apartment, Economy, Recession, Housing
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