Predictions for the 2014 housing market are out. As always, there is good news, and there is some bad news for property managers. However, with a little direction, there is no reason why 2014 cannot be a success. Knowing what tenants are looking for and how to market to your target demographic will ensure a positive outcome.
Falling Homeownership Rates
Homeownership rates are expected to fall below 65% in 2014. This is due in part to the 3% increase many homes are expected to gain in value this year, making the cost of homes more expensive, and also to climbing mortgage rates. The mortgage rates in 2014 are expected to rise, some even saying to 5% by the end of the year. The rise of mortgage rates means inevitable growth in the renters market as the cost of affording a home goes up. The only issue here is that there is also limited wage growth, meaning the renters market is limited as well. It is important to know the demographic you are going for so that you can market effectively.
2014 is showing a great divide among renters. On one side of the spectrum, there are college graduates who are burdened by debt and low paying jobs. On the other side, we have baby boomers that are downsizing from larger homes and moving into smaller, more luxurious ones. This divide in the demographic leads to predictions indicating the leasing of mid-priced apartments will drop. Planning a marketing strategy to entice one of these two groups will be key to successful leasing in 2014.
More tenants are finding themselves looking for efficient options when deciding where their next home should be. Low energy appliances are an expectation among those looking to lease. Windows that block UV rays and that are also energy efficient is another growing trend for those seeking to lease. The good news is that tenants are willing to pay for these upgrades because they know that over time it will save them money.
Digital upgrades are another amenity renters will be looking for this year. Things like Wi-Fi are a necessity. Renters are expecting a more digital approach to the landlord-tenant relationship as well. Options like being able to pay rent or requesting maintenance online make renting a more streamlined experience that tenants will appreciate. Advertising rentals should also take this approach to bring in perspective tenants. Gone are the days of just putting “for rent” signs in the lawn. It is essential to post rental vacancies online to get the most interest in your property.