Industry News | Week of
HOT & RELEVANT TOPICS
Appealing to the Modern Renter’s Economic Mind
Netflix KO’d Blockbuster with streaming services. Uber ousted yellow taxis with more transparent pricing before riders ever got in the vehicle. Does the multifamily industry translate the concept of “one-click experience” into its processes to similarly reshape the industry? Maybe not as rigorously as Amazon made catalog shopping a thing of the past, but chatbots, resident apps and advanced package management (beyond the lockers) are a step in that direction. While those concepts are regular components of tech conversations, a few others are emerging. That includes lease insurance (in place of security deposits), and hotel-like services, including dog walkers, dry cleaning and other services that help overextended renters. Read Lynn Owen’s ViewPoint in Multi-Housing News.
ORA Power Rankings Year-End Summary: 2019 at a Glance
While it’s no secret that the prevalence of online reviews is ever increasing, it’s astonishing that multifamily review volume increased a whopping 19% in 2019. The total soared to 9.3 million in the calendar year and renters are becoming more and more influenced by these reviews. According to a study involving more than 22,000 renters, online reviews account for 58% of the total influence in a prospect’s decision where to rent. That’s up from 52% in 2018. Among the highlights of the ORA Rankings was The Bozzuto Group’s fifth consecutive first-place finish among the largest apartment operators. AvalonBay was ranked the top REIT with regard to online reputation for the third straight year and The Dinerstein Cos. were No. 1 in the student sector for the second straight year. Read Joseph Batdorf’s article in Multifamily Executive.
Innovations that Create Resident Loyalty and Don’t Rely on Technology
While the apartment industry’s focus on technology is certainly justified, owner-operators shouldn’t lose sight of the pronounced impact non-technological amenities can have. While a mix of both is ideal, amenities such as concierge and lifestyle services, exercise and wellness classes, appealing social areas and a wide array of classes and events can have just as much of an impact as anything of the tech-savvy variety. Examples of the latter include painting classes, movie nights, performances by comedians or musicians and occasional TED Talk-style lectures by innovators and creative thinkers. Even in an increasingly digital world, residents still extremely value human connections and personal touch. Read Dennis Cogbill’s article on Multifamily Insiders.
IN THE NEWS
Apartment jobs were on the rise in 2019
Apartment sector jobs comprised nearly 40% of all positions in real estate in Q4 of 2019, which marks a 6.4% increase over the final quarter of 2018. The apartment industry’s share of real estate jobs at the end of 2019 was nearly 10 percent higher than its average for the previous five years. Dallas took over as the top market for apartment jobs, displacing Los Angeles, which was second. Denver and Austin led the way in terms of the highest concentration of job demand in the apartment sector, with both markets three times higher than the national average. Leasing consultant and maintenance supervisor positions had the greatest increase in demand, climbing 1.9% since 2014. Read the NAA story in Multi-Housing News.
Fighting Rising Multifamily Labor Costs
The hot job market and low unemployment rates have caught up to multifamily operators, leading to a 5.4% increase in 2019 for salaries and personnel expenses – the highest jump in 15 years according to NAA’s 2019 Survey of Operating Income & Expenses. Operators are being forced to continually compare their recruiting practices and compensation packages against their competitors, and to get creative with benefits and bonuses. It’s also presenting a challenge in terms of in-house customer service, as some operators turn to technology to get the job done with fewer people. However, many companies are accepting the unprecedented salary increases and benefit packages as the new normal, striving to retain personnel and maintain customer service levels. Read Joe Bousquin’s National Apartment Association story.
Where rent prices surged and plummeted in 2019
Utah is up, Montana is down and Detroit’s rental rates surged, according to realtor.com data for 2019. The apartment industry saw historically low vacancy rates in 2019, and also rising rent costs. Nationally, the median rent for one-bedroom apartments went up 4.1%, while two-bedroom rates climbed up by 5.5%. At the state level, rent increased the most in Utah, as people fled higher priced hubs for a more affordable lifestyle, while conversely Montana saw rent prices slip by 1.6%. The biggest price cuts of any market were found in Dayton, Ohio, which saw rates fall by 4.11%. Meanwhile, bolstered by its first new construction in years, Detroit rental rates saw a 7.48% spike. Read Julia Falcon’s story on Housingwire.com.