Taking a look back at 2020
We've all heard it: 2020 was an unprecedented year. No one could've expected the COVID-19 global pandemic during a year of a presidential election, not to mention the social justice movements gaining so much momentum while we were under stay at home orders. We all saw how these unexpected events took a toll on the rental markets in the urban cores, while groups flocking to the suburbs snatched up properties quickly and for higher rental rates. Combine this with renters affected by lay-offs, the eviction moratorium, rising vacancy rates and a "work from anywhere" culture and you've got the wild, challenging year that was 2020.
Looking ahead: The 2021 Summer Rental Market
So what can we predict about the rental market and the upcoming 2021 summer season? Here are some of our predictions:
- Inventory is still low in the suburbs and high in the cities: We've seen this happen throughout the pandemic - last summer, rent prices were on the rise in the suburbs due to the limited inventory and increased demand. However in the more urban areas, the percentage of rental listings featuring concessions (like free weeks of rent) rose to over 30% in July 2020. It's hard to say how long this inventory trend will continue, although we don't see it changing much this summer.
- Record high renewal rates in 2020 could be good for 2021: According to RealPage, apartment retention rates peaked at 58.5% at the start of the pandemic in April - which is higher than ever before. So tenants who renewed their leases in 2020 and postponed moving during the pandemic might feel extra ready to make the move this summer.
- Buying a house may continue to be difficult enough to keep people renting: The oldest Millennials are reaching the home-buying age, but with student loan debt and affordability on the decline, this age group actually makes up almost half of all renters. Even more interesting, an increasing percentage of renters are now considered high-income earners since homeownership continues to be out of reach for so many.
- There may be a migration back to the urban core: While many companies are still remote, more and more companies are moving back towards an office or hybrid work setting as the end of the pandemic seems near. This means that a lot of the people who moved out of cities during the pandemic may return as offices and other amenities open up. They may even return to find lower rent prices!
- On the flipside, lifestyle is more of a priority than ever: With workplaces and schools going remote last year, lifestyle became a bigger priority than where one works or the school year constraints. Only time will tell how much the lifestyle priority will affect where people choose to live.
- Nationwide vaccine availability can help get us "back to normal": Thanks to the Biden administration, all adults will be eligible for a COVID vaccine starting May 1st, with the goal of returning to some kind of normalcy by July 4th. We can't exactly predict what this will look like, but there could be a much-needed market resurgence on the horizon.
- Emphasis on the adoption of property management software: In a world that went remote this past year out of necessity, the adoption of technology has jumped leaps and bounds. And we definitely see this in the property management industry - according Grand View Research, the global property management software industry is projected to grow from $1.58 billion in 2019 to $2.58 billion by 2027. This means more and more property managers are deciding to work smarter, not harder.
- Increase in tools used to delight customers: As the younger generation of renters enter the market, these tech-savvy tenants expect technology to be part of their rental experience. Technology tools and software that optimizes user experience and focuses on building the customer relationship from the start will be in high demand this year.
The takeaway: It's hard to predict how the 2021 summer rental market will look
However this summer's rental market turns out, you can be sure that Showdigs always has your back! Our software is priced to fluctuate with the seasonality of the rental market, and for smaller property managers or anyone who wants to try us out, you can use our state-of-the-art scheduling software for your first 3 vacancies for free! Click here to get started.