For those who don't know, Franklin & Marshall college has made the move to bring the majority of undergraduate students, into on-campus housing effective this fall.  Estimated at 900, the off-campus student market has a boon to landlords as far back as the 1920's.  What this drastic reduction in tenants will do to the neighborhood housing market, currently enjoying a growth spurt, is unclear. 

 Some locals say that about 300 students will still be able to rent off-campus for one more year due to continuing construction of dormitories.  Still, a 66% drop in tenants will likely cause many long-term landlords to seek new sources of rental income.  But will the young families and professionals want to settle for ex-student housing?  I think that will be the sticking point. 

In my work with first-time homebuyers, the NW end of Lancaster plays heavily into the equation - the prices there for a 1,200 square foot, 3 bedroom townhome hover around $110,000 which is significantly less than a suburban home.  But if appraisers have to deal with properties coming on the market with dubious condition issues, it will be hard to sort out the nicer examples from which to draw comparables.  Overenthusiastic listing agents upgrading condition (i.e. "fair" to "very good") won't help anybody either.

In the end, as always, nice properties which are well-maintained will command top dollar.  The question for now is; will landlords used to $300 per head from students be willing to spend capital renovating run-down row homes to prepare for the next wave of tenants?

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