The multifamily housing sector certainly took a hit this past year but it still managed to weather the storm and persevere in comparison to others. However, property owners still felt the loss of income and are hopeful to start moving forward these next coming years with multifamily housing trends for 2021 providing that glimpse of hope they are looking for.
Urban multifamily properties felt the greatest impact in 2020 when compared to those in the suburbs. With cities shutting down or limiting services, employees working from home and public transit becoming less desirable, many started to set their sights on moving to the suburbs where rent cost less or didn’t cost anything at all. Young adults were able to move back in with their parents or friends until the economy started to look upward and older generations left the appeal and convenience of urban life for more space and affordable living. The restrictions set because of Covid caused many to reevaluate prioritizing needs over desires. Because of this, suburban submarkets will take the lead for 2021 offering lower costs, more space and a change of scenery. This of course is not to say that urban multifamily housing units will undergo a permanent negative impact but it does mean it will take them some time to catch up with other multifamily housing sectors.
Increase In Multifamily Investment
Multifamily housing may have endured many changes in 2020 but economic rebound is already being projected for the near future with a significant rise in comparison to last year by 33%. The economy is starting to gain traction, providing greater financial security and opportunity to live independently. With many investors in 2020 deciding to hold back until they could see a foreseeable future, others continued to invest creating a higher investment demand when compared to previous recessions. As long as market conditions continue to improve, multifamily investment volume should increase. A continuance of favorable mortgage and low interest rates will help incentivize future investment.
Digital Tour Appeal
Digital has long been the ruling preference for the average consumer and with younger generations seeded in the digital world this will only continue as we press into the future. When it comes to multifamily properties, those looking to rent are expecting a personal and yet easy way to explore their options via digital tours. There is still a part to play as a property manager but what catches the interest of potential tenants is what they will first see on a screen. That along with personable interactions with the management team is how renters will be drawn towards specific properties. When multifamily housing properties can master the digital world they have a significant advantage over their competitors. Pricing and amenities of course will still play a part in whether potential tenants will be interested but getting their foot through the door is key.
Continued Safety Measures
It may have taken some time to adjust to all the safety measures that were mandated throughout the different states but the world proved its ability to adapt and now it seems that that adaptation has become a lifestyle. People now expect certain safety measures to be in place when traveling outside of their home so where others are adapting we have to learn to not only adapt with them but be one step ahead. By emphasizing an array of safety measures through community spaces tenants will feel more at home and be drawn to their personal surroundings which contributes to slower turn over rates and appeal for new renters. It also ensures the safety of staff which is just as important as those you are renting to. Building a strong sense of safety for everyone to do life creates a healthy atmosphere throughout each property that everyone will notice.
If there is anything that the previous year taught us it’s that there are no absolutes. As we forge ahead with the intention to make the best out of what the new year has to offer we have to be willing to be flexible and pivot at a moment’s notice. Fortunately, the multifamily housing market is essential as the population continues to thrive in numbers creating demand for multifamily housing.