The Rental Market is Changing: What the Rental Landscape Looks like Heading into 2023
Strategies for Single Family and Multifamily Property Managers in 2023
Redfin recently published their Q3 rental market research, and some of the results are astounding. The upward trend in renting has been the norm since the pandemic, transforming how we look at real estate and home buying. Low inventory and large demand meant that rent rates had the upper hand. We’ve seen the impact this has had on the market and the population, with almost unfeasible costs to the renter.
To meet the record breaking rent and mortgage prices, the economy shifted creating inflation rates that we all have felt the effects of on our budgets and bank accounts. Many renters have been unable to take the next step and invest in a home, resulting in longer leases and more renewals.
"Redfin’s Q3 analysis found that month-over-month, US median rent rates are finally coming down, and year-over-year rent increase percentage has finally dipped back into the single digits."
Both signs that inflation rates are catching up with US renters and signaling a change in demand and renter behavior. Considering the massive rise in rent and mortgage prices over the last two years, a cool down period was inevitable and is a welcome change for renters.
The monthly median rent price coming down from $2,039 in August to $2,002 in September is the most apparent indication of the market’s future. Taylor Marr, their Deputy Chief Economist, stated that rent growth will continue to slow into 2023. New multifamily housing and apartment communities completing development will also ease the supply and demand tug-of-war, freeing up renters to find what works for their budget.
What does that mean for property managers heading into 2023?
Choosing strategies to lower costs without sacrificing quality, will ensure that your single family and multifamily properties continue to succeed during changing times.
With move-outs slowing down, demand for trade labor has followed. Simple supply/demand says that as trade labor slows down, pricing comes down. Now is the perfect time to shop around and/or negotiate new pricing with your vendors. Getting your maintenance and turn costs down, will allow you to match the trend in rent rates and keep your communities competitive.
RM Interiors offers flooring materials and installations across 15 markets across the US. We cultivate flawless services for all single family and multifamily clients in the rental industry. Our teams specialize in rapid turns and renovations and our warehouses are stocked with materials used in hundreds of thousands of rental properties across the country.