On today’s show we’re talking about the difference between price versus value.
So often I see new houses, new apartments that are very “traditional” in design. I have nothing against tradition. But it doesn’t take very much thought to imagine how a family will live in a space.
You can tell those who design based on a spreadsheet. They simply maximize the building envelope to what the zoning code allows. They maximize the height, they maximize the number of units and the number of bedrooms without any regard to how the space will live. They put the minimum sized closet that will legally classify the room as a bedroom. After all, the appraised value for a two bedroom apartment will be higher than for a one bedroom. It’s all about maximizing the appraised value.
Or is it?
Those of you who know me, will know what’s coming next. That’s right. I’m going to bring up the law of supply and demand. But I’m going to focus on a more granular segmentation of the law of supply and demand.
It’s not just the supply and demand of houses, or apartments that matter. It’s the supply of features amenities that matter.
In a dense urban environment like our projects in Philadelphia, we aim to include parking even if there isn’t much land available. You see there is so little parking available in the core of Philadelphia that it’s not just the supply of 2 bedroom apartments that matters, it’s the supply of 2 bedroom apartments with parking that’s the differentiator. Unless our society moves to a post-automobile form of transportation, the shortage of parking in Philly is going to continue for decades to come. If there were ever to be an elevated vacancy rate in Philadelphia, those apartments with parking will still always be fully leased.
The large garden style apartment complexes are increasingly participating in the amenities arms race. They’re adding a playground for the kids, a dog run, a splash pad for the kids, pickle ball courts. The list seems to grow longer with each passing year.
Go back ten years, how many people were taking delivery of goods and services through e-commerce? Is there a place for the delivery of large parcels to be held securely?
So back to tradition. The traditional home has a formal living room, a dining room, a kitchen, guest bathroom, master bedroom with en-suite bath, kids bedrooms, a laundry room, and a front closet.
But today, the hub of the house is the kitchen, larger than kitchens of previous decades. The living room is usually furnished and never used. The formal dining room gets used once every few months, if at all.