2020 brings us into a whole new year, and naturally, we must be prepared for the new wave of changes that will affect the multifamily market.
Such changes are always inevitable, especially now that an entire decade has finally concluded. However, one must always be ready for when the market of multifamily decides to change up the rules whether it falls in your favor or not.
One change as of late is the slower demand for multifamily properties. A couple of months before 2019 ended, a recession was investors’ biggest concern for the next year.
As of late, CBRE projected apartment demands to only reach 240,000 units for 2020, about 20% less than the estimated 300,000 units in 2019.
This is nothing of concern, as multifamily properties will continue to do business in the market. It’s only important for investors to know a few things when it comes to handling a slower demand for apartments:
Focus on suburban areas.
According to CRBE’s data, a shift in strategy is needed as suburban areas may profit more this year than urban areas, especially in markets where vacancy is low and rent growth is high.
Millennials are still in the market.
Whether demand for multifamily is low or not, you can still count on millennials to still be available in the market. However, try to consider the problem of affordability as this may keep them from moving in.
Make use of the vacancy while you can.
Since vacancy rates have a possibility of rising to 4.5 percent, according to CRBE, perhaps it may be time to freshen up those empty spaces while you can.
You never know if you’ll have a potential tenant who will be staying for the long run, and they might want an apartment that’s a little more than just decent.
Estateserve is here to provide the latest tips for upcoming multifamily trends.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
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How can landlords adjust their pricing and incentives in a slower market?
Landlords can adjust their pricing and incentives by offering move-in specials, providing lease renewal incentives, and offering short-term or flexible lease options to accommodate tenant needs.
What are some effective marketing and leasing strategies for handling slower demand?
Effective marketing and leasing strategies for handling slower demand include updating property listings and descriptions, offering virtual tours and online leasing options, partnering with local businesses and organizations, and streamlining application and leasing processes.
