Thanks to recent data, we know that the U.S. apartment market has fallen negative on a year-over-year basis for the first time since 2009.
This is shocking, especially considering that the apartment market seemed like it was consistently enjoying nonstop growth, but now it finally looks like the party may be over for over, at least for a while.
The big question is why is apartment demand slipping nationwide? And how long will this continue?
In this article we will answer these questions and offer your insight into what the apartment market will look like in 2023 and beyond.
Low Consumer Confidence
Let’s face it, consumer confidence is everything in today’s world, especially in the rental market, but the reality is that in 2023 all signs point to consumer confidence having fallen flat.
With inflation hitting consumers hard, along with the recession, most consumers are staying put.
Instead of moving on to bigger and better apartments, consumers are staying in their existing rentals, and this has led to no waves of turnover from renters.
Besides inflation, weak job growth and poor wage gains are also contributing to the lack of demand for apartments nationwide.
All But Evaporated
Some economists are saying that apartment demand has ‘all but evaporated’, and it’s not just the rental market that’s been affected, demand has also slowed significantly with other rentals and for sale homes as well.
Right now, renters are staying put, paying on time, not doubling up and we’re not seeing and major changes coming to the apartment market.
This is good news for owners but with low consumer confidence, we may see rentals listed on the market for longer periods of time, and owners may have to offer more amenities and concessions to attract renters, at least when it comes to Class A Apartments.
Ultimately, things may play out in 2023 like they did in 2022 and that’s not necessarily a bad thing for some investors who are still recovering financially from Covid-19, but for bigger institutional investors, the state of the apartment market is a cause for concern.
Contact Us
At GoldenWesst Management, we specialize in managing multifamily and since family properties in San Diego, Phoenix and Las Vegas.
If you need property management for your rentals, contact us today by calling (866) 545-5303, or click here to connect with us online
