This year, there are 943,000 units of multifamily housing under construction. This is an almost 50-year record high.
Rental vacancies in the last quarter of 2022 were up 5.8% nationwide compared to 5.6% in Q4 of 2021.
Pivot away from less effective tactics and find channels that bring in new traffic and nurture leads.
The rental market slowdown is now here. What’s next for owners and operators?
With softening marketing conditions, multifamily owners and operators are under pressure to maintain occupancy and generate demand. Here are the major market trends that impact a property’s day-to-day operations and what you can do about them.
What’s changed this year?
The rental market looks a lot different than it did last year, and multifamily is adjusting after years of historically high demand and rate increases. Market analysts are seeing softening gambling data singapore phone number market conditions with high rates of apartment completions and new construction, higher vacancy rates compared to last year, and declining rent rates. These changes are also clear in renters’ online search activity. Demand for rental-related keywords on Google steadily declined from July 2022 to December 2022.1
We’ll get into the five biggest trends that are impacting property teams, and what you can do to keep occupancy high despite changing market conditions.
Growing supply of new properties entering the market gives renters more options and heats up competition for established property teams. This year, there are 943,000 units of multifamily housing under construction, according to the National Association of Home Builders.2 This is an almost 50-year record high. More projects are in the process of being completed at one time than we’ve seen since the 1970’s.
Actions you can take: See how your community stacks up against new properties, and prepare for future competition.
During what is historically the busiest leasing period, apartment demand unexpectedly fell in the third quarter of 2022.4 The U.S. Census Bureau reported rental vacancies in the last quarter of 2022 up 5.8% nationwide compared to 5.6% in Q4 of 2021.5 Midwest and Southern regions had the sharpest increases in vacancy last year, up to 6.9% and 7.3%, respectively. The Western region followed behind at 4.2%.
Rising inflation rates, mass layoffs and high costs all contribute to a broader sentiment of economic uncertainty. In response, many renters have paused on moving or are combining households to save costs. High inflation across the board also has renters focused on affordability.
Actions you can take: Focus on resident retention and explore new channels to bring in renter leads.
Rent rates nationwide have also started to cool. Analysts across the board expect this pattern to continue in 2023, with effective rent growth projected to drop by as much as 4.3%.6
Actions you can take: Explore ways to maximize efficiency in your operations.
The cost to reach renters is increasing for advertisers. Compared to 2021, Meta’s cost per thousand shot up 61%, TikTok’s CPM came in at 185% higher and Google’s programmatic display CPMs rose 75%.7 These rising prices have been attributed to a variety of factors, including price volatility of new ad platforms and policy changes that make ad targeting more difficult and expensive. In an industry already challenged with effective targeting and FHA requirements, multifamily advertisers have to be extra vigilant in effectively using ad dollars in the future.
Actions you can take: Refine targeting strategies to reach relevant audiences and cut unnecessary costs in your marketing budget.
