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Archive for March 2009
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Understanding the Over-Supply of JMU Student Housing
By Scott Rogers  •  March 2, 2009     
JMU Residence Halls

As I explained yesterday, there will be a rather significant over-supply of housing for JMU students in the fall, with an estimated 1,740 empty "beds" across all student housing options.  As a reference point, my calculations show a current over-supply (during this 08/09 academic year) of approximately 1,075 beds.

Why does this over-supply of housing for JMU students exist?
  1. JMU was projected to grow, and a lot of developers started student housing projects to take advantage of this growth.  Of note, in December 2007 I pointed out that the the way the media has been counting JMU students might lead student housing developers astray.
  2. Harrisonburg put a time table (deadline = July 2010) on building student housing development without having to ask for permission.  This encouraged (along with the growth projections) many student housing developers to get started immediately.
What effects will we see of this over-supply of housing for JMU students?
  1. Some housing complexes will likely have high vacancy rates next year.  Student housing trends from around the country would suggest it will either be the oldest complexes, or those farthest from campus.
  2. Rental rates may decrease, as landlords compete to find tenants.
Who needs to know about this over-supply, and what should they do?
  1. Student housing developers should carefully consider their planned development timeline to account for an over-supply in the market.
  2. Owners of student housing properties should position their property carefully in respect to price, included amenities, lease terms, etc.
  3. Potential purchasers of college student housing should carefully consider the implications of such a purchase in our current market.  Those purchasing solely as an investment need to be aware of possible declines in rental rates, and increases in vacancy rates.  Those purchasing to have a place for their son or daughter to live should likely still consider a purchase, but should be aware of market conditions.
  4. Owners of "possible" student housing properties (i.e. townhouses somewhat near JMU, but not in student housing complexes) should consider targeting the non-student market.
The JMU student housing market is entering a new cycle where supply will well exceed demand.  Our market has not seen this type of an imbalance in many years, so many of the implications remain to be seen.
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Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 23, 2024 (unless otherwise noted).

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JMU Student Housing Supply & Demand Analysis
By Scott Rogers  •  March 1, 2009     
Charleston Townes

As we approach the 2009/2010 academic year at JMU, I believe we will be facing a significant surplus in student housing for JMU students.  However, do bear in mind that there are many factors that make it difficult to track the actual supply and demand for student housing, including:
  • There are many metrics by which JMU measures their enrollment, some of which include part-time students, those studying abroad, faculty and staff enrolled in courses, etc., each of whom may not actually need student housing.
  • Aside from student housing available in well-defined areas (on campus residence halls, apartment complexes), there are also many housing units that may or may not be leased to JMU students in any given year (single family homes, individual townhomes in communities near campus, etc).
To analyze the current student housing supply and demand, I used Fall 2007 enrollment data as a baseline (17,428 students), and I made the assumption that there was a balance between supply and demand for the 2007/2008 academic year.  In other words, I assumed that there were approximately 17,428 "beds" available for students (on campus, off campus complexes, off campus houses, off campus townhouses, etc).  I believe there was some small amount of vacancy at that time, but it was negligible.
   
On the demand side of the student housing equation, enrollment for Fall 2009 is projected to be 18,928 students.  This is an increase of 1,500 students as compared to our Fall 2007 baseline.

On the supply side, I estimate that 3,240 additional beds will be available for Fall 2009 as compared to Fall 2007.  These new beds are located in the following communities:
  • JMU Residence Hall
  • 865 East
  • Campus View Condos
  • Charleston Townes
  • Copper Beach
  • North 38
  • Sunchase
  • Urban Exchange
Thus, per my analysis, there will be a surplus of 1,740 beds for Fall 2009.  This equates to an overall vacancy rate of 9.2%.  Accounting for anticipated enrollment growth, the continuation of current student housing projects, and the onset of new student housing projects, I anticipate the following surplus housing supply in the coming years:
  • Fall 2009    1,740 bed surplus    9.2% vacancy
  • Fall 2010    1,351 bed surplus    6.9% vacancy
  • Fall 2011    1,066 bed surplus    5.3% vacancy
The above projections do not consider additional projects that may come online that are unknown at the current time.
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Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 23, 2024 (unless otherwise noted).

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