Milford area apartment market shows no sign of slowing

MILFORD — Apartment projects continue to pour into the city, but real estate professionals do not yet see the local market being over saturated by any means.

Milford has become a hotbed for apartment developments. Most recently, the Planning and Zoning Board approved 36 units at 67 Prospect St. and another 180 apartments at the former Kmart location located at 589 Bridgeport Ave.

“I think that we have the ability to support more, especially that market-rate style apartment that is coming in,” said Kevin Wiersman, owner and broker of Total Realty Services, LLC.

“It can have a positive or negative effect,” Wiersman said, “But the overall opportunity right now is still very good for Milford. I honestly think it will be a while before we see any kind of an adjustment down in apartment values.”

He added that he doesn’t see any of the new developments leading to a drop in the market rate because demand is very high.

“They will fill, and they will stay full,” Wiersman said.

A big reason why the market is strong in Milford is because of the age group that is renting in the city, said real estate broker Al Melotto, who also works at Total.

“You are getting the younger professionals coming in that are looking for a more centralized location,” Melotto said. “Walking distance to the downtown and the train is attractive.

The lack of inventory in the housing market also plays a role, Melotto said.

“I think the younger age group is getting squeezed out. I think the first-time home buyers are having a harder time getting their foot in the door,” he said.

The age of the home buyer is on the rise, according to both Melotto and Wiersman, which they said is due to a number of circumstances.

“The millennial generation in the marketplace is buying homes at a much older age than has historically been typical,” said Weirsman.

The progression of how each of the three core generations bought houses has been interesting, Wiersman said. He pointed out that the baby-boom generation bought houses when they were in their 20s, and Generation X, those born between about 1965 and 1980, bought their homes when they were in their 30s.

“But we are seeing a lot of this millennial generation, some of them are in their 40s, but that’s when they’re conceptually going to be settling down, looking for more of that single-family (home) life,” he said. “A lot of the younger folks are waiting longer to have kids. They are experiencing more of their young adult life and living instead of immediately starting a family and waiting until retirement.”

“So I think that is a major, major influence on housing stock and apartment demand,” Melotto said.

Like Milford, the duo has seen other places approve a substantial amount of apartment development, one of those being New Haven.

Over the past five years, they have seen higher-end, market-rate apartments being built in New Haven, and the apartment owners have had no trouble filling them.

“There’s a lot of multi-family available in New Haven, but what there hasn’t been is solid, stable market rate, desirable apartments in the center of New Haven,” said Wiersman. “Over the past couple of years several thousand units came online and they’ve all filled up. And not only that, they’ve sold at some of the highest prices to secondary investors.”

In the New Haven market, neither the developers nor the long-term passive investors are seeing any kind of drop in values coming in the next 10 years, said Wiersman.

“The demand has been so great for this particular type of development that the sky is the limit. Anywhere will eventually come up with a saturation point, but we haven’t seen it yet,” he added.

However, Wiersman said the most frequent request Paredim Communities — a company that owns several rental properties in Milford — receives has been for two-bedroom units. As opposed to the apartment market in New Haven, where the company is seeing a shift to slightly smaller units in the condensed city setting because there is a high demand for apartment units.

“But we are also seeing a major trend in these facilities that there is a live, work and play component,” said Weirsman.

One of those apartment styles is at 4 Oxford Road, Milford’s first live-work units, which Melotto said more of the same kind will start to be proposed and built.

The other town that has started to see downtown growth in apartments is Shelton.

“It’s great because they’ve essentially changed that town from having a quiet, almost forgotten downtown setting, to having an incredibly vibrant downtown,” said Melotto.

The only negative to the Shelton developments the duo sees is a lack of parking in the downtown environment.

“One of the negatives Shelton has always had was there was a deficit of parking spaces for people out of that area to frequent those downtown restaurants and businesses,” said Melotto. “So now they have a built-in clientele because they are living across the street or above that building.”

Like the complexes in Shelton and New Haven, Milford’s apartment market is showing no sign of slowing.

“A lot of the developers we’ve spoken to tell us they are running north of 95 percent occupancy right now,” said Weirsman. “That tells us that there’s a demand.”

Some of the approved apartment projects are near the downtown area such as 44-64 River St., a 50-apartment project, which Melotto said will help the local businesses in the downtown area.

“Local businesses are going to see a big benefit of people moving in,” he said. “We see some development happening in the downtown area. Once those are completed, you are going to see restaurants get busier, these mom and pop boutiques are going to see more foot traffic, and it’s going to create more hustle and bustle downtown. That’s what we need down here.”

Both Weirsman and Melotto said the market-rate desirable apartments are a necessity for communities to survive going forward.

“Market rate apartments are necessary for towns to stay competitive and for business to stay competitive and thrive,” said Weirsman.

“Businesses need it,” said Melotto. “Cities need development, and we need the people.”