Multifamily Outlook: Change Will Do You Good

Multifamily|Thought Leadership|Trends|

Multifamily leaders — and their marketing partners — see good market conditions to go with their plans for better performance. 

The COVID-19 pandemic certainly wasn’t a breath of fresh air, but it led many renters to pursue one. As a result, thousands of people chose to migrate from high-density cities and multifamily living to bigger suburban spaces, both inside and out, where they could work from home and smell the figurative roses. Yet, once the shock wore off, the pandemic exodus proved no match for a resurgent economy and a country still facing a severe housing shortage.

“Unlike many recessions, real estate was neither a cause nor a casualty of the recession in 2020,” Steve Theobald, executive vice president and chief financial officer of Walker & Dunlop, wrote in REBusinessOnline. “Net absorption of market-rate apartments rebounded in the second half of 2020 and ended the year up 6.8 percent from 2019 levels. In the first half of 2021, net absorption reached record levels, more than double the 2020 pace and 60 percent higher than that of 2019.” 

Despite labor shortages and supply chain adversity, the economy is rebounding in an impressive manner, even “booming,” according to Theobald, who cites a 7.8 percent growth estimate in the second quarter following 6.4 percent expansion in first quarter 2021. The growing population of vaccinated Americans certainly helps the cause, and the rental market benefitted from the eviction moratorium enacted by the Centers for Disease Control (CDC) in September 2020 and extended beyond its original July 2021 expiration. The surprisingly good news for landlords is that unpaid rents only increased a fraction year over year. 

Job growth and rising consumer confidence help every part of the economy, including the apartment sector. The Southeast, infinitee’s home turf, adds the advantages of relatively low costs, attractive weather and growing demographics, to that major momentum. Tampa, Jacksonville, Orlando and Atlanta all ranked in the top job growth markets, but with unemployment rates in the 4 percent to 6 percent range, Theobald reported.

Those demand drivers lead to higher rents, which then support new construction. That’s more good news for the multifamily sector, but developers and owners face a new challenge: staying on top of changing tenant expectations, especially since the start of the pandemic. As people spent more time at home than ever during COVID-19, they increasingly demanded “smart spaces that are inspirational, sustainable, cost-efficient and designed to be future-proof,” according to Bisnow.

infinitee has covered this space of retail’s balancing of “bricks & clicks,” but multifamily owners are also having to elevate their CX offerings in these changing times. Bisnow reported on STRATIS Smart Building’s “sidewalk-to-sofa” smart technology experience for residents of apartments and student housing — smart for another reason given that there are 68 million prospective renters within Generation Z who prize tech-based amenities. The smart building experience includes intelligent and integrated approaches to building access, WiFi, and energy, waste and water management.

“Some fear change, especially the kind that 2020 brought, but leaders in multifamily, marketing and other industries view it as another opportunity to effect change for the better,” said Barb McGraw, infinitee’s CMO.

Whether in a slowdown or rebound, we salute those real estate leaders who stay committed to reaching new heights through strong collaboration and innovative, creative, highly engaging and high-impact strategies.


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