A 'Normal' Number of Potential Apartment Residents are Shopping for a Place to Live
And their options increase as more inventory becomes available in the pipeline from a year ago.
With rents declining and supply increasing, some normalcy in apartment traffic may be a relief for landlords. May 2023 numbers represent a continuation of what has occurred over recent months, according to a post from RealPage Analytics.
RealPage Analytics bases its estimate on lead volumes from virtual and/or physical guest cards, which prospective residents fill out to share their contact information as they hunt for a new place to live. Of course, it is not a guarantee of a done deal but rather a possibility that someone looking might rent in a specific building.
RealPage reports that the May leads are above the cycle in the years around 2010, after the Great Recession occurred, but down from the very busy period of 2021-2022 when residents moved, often because they could due to remote work opportunities.
RealPage describes the ebb and flow of what’s happening now as potential renters “shopping at a seasonally normal rate.” And its data leads it to expect that the coming months through the end of the year will bring more of the same: good traffic according to seasonal norms but weaker than typical rent growth.
At the same time, there are some differences worth noting. One is how much new inventory renters looking at now might see since there’s a 20% increase in the construction pipeline now versus a year ago May 2022. Second, occupancy rates are not as tight as they were a year ago and are generally back to historically normal levels. Here, there’s an exception, too, with Class C stock much more limited and also experiencing less new inventory becoming available than with Classes A and B. As a result, it is seeing more rent growth.
The Midwest/Rust Belt markets are experiencing stronger rent growth while portions of the Sun Belt and some coastal submarkets are having weaker rent growth. This was noted by GlobeSt.com, even back at the end of the year. Apartment List noted signs of demand heating up in Midwestern markets with St. Louis, Indianapolis, Kansas City and Cincinnati metros all ranking among the top 10 for fastest rent growth in 2022.