The Wall Street Journal reports:
Some of the millions of students heading back to college—and their parents—are finding a pleasant surprise: Landlords nationwide are cutting rents because of an oversupply of student housing in college towns.
Since 2010, private-equity firms, real-estate investment trusts and private developers have been cranking up delivery of off-campus accommodations, often rich with amenities such as pools and movie theaters. That has raised fears of a glut in some markets, which has sparked a rout in the stocks of developers specializing in student housing.
There's more:
developers appear to have overshot the mark in numerous markets. Some of them failed to take into account other construction that was planned, say experts. Others misjudged future enrollments or the willingness of students to pay up for off-campus living at the time when many families are still pressed in the aftermath of the economic downturn.
With vacancy rates rising due to the new supply, new and existing complexes near schools such as Florida State University, Kennesaw State University in Georgia and Arizona State University are being forced to cut rents to fill beds.
The higher education bubble and housing bubble merge into one great union of oversupply.
