Leaving "home"? Apartments increasingly popular
After a long slump, the home construction industry may be showing signs of life.
The government reported today the number of permits to build new homes was way up - nearly 15 percent - in June compared to the previous month.
CBS News correspondent Bill Whitaker reports that the real growth was in apartment construction, which was up nearly 32 percent.
When the housing bubble burst, Alpha Construction managed to stay afloat holding onto the one lifeline in home construction: apartments.
"Alpha has been very busy with apartments," says Paul Novell, a site supervisor.
Novell says more apartments are on the drawing boards and there's more competition for projects.
"We are building a lot and making estimates a lot. There's more competition, because the homebuilder is trying to come into the apartment industry," Novell says.
While new home permits in L.A.'s suburbs were down as much as 42 percent the first quarter of this year, almost 1,000 permits to build new apartments were issued in May alone, the most in three years.
The surge in apartment building is being fueled by economics and demographics. Many older retirees and younger workers are choosing apartment living over home ownership. Apartments are more affordable and offer more flexibility.
"I don't miss property taxes. I don't miss big utility bills," says new apartment dweller Jonathan Fitzgarrald.
Fitzgarrald sold his five bedroom suburban house two years ago and moved to an in-town apartment to be closer to the active urban core. His mortgage was $12,000 a month. His rent is $4,500.
"Now I want to be closer to the office. I want to be close to my friends, and I want to be close to restaurants I go to on a regular basis," Fitzgarrald says.
It's a trend developer Rick Caruso noticed years ago. He builds outdoor malls based on old urban models: retail below, apartments above.
"This is a cultural shift with the dollars following; net positive for the economy, net good for the economy," Caruso says, adding that the apartment boom shows no signs of abating. He has 11 projects in the works.
