Following the 2016 presidential election, homebuilder confidence hit its highest mark since 2005. Ending the year at a rating of 70, the National Association of Home Builders statistic portends moderating rental rates for 2017.
Why does high builder confidence affect rents? When prospective tenants have lots of more affordable housing options on the real estate market, they’ll build or buy instead of rent. In the face of record rent increases in 2016, that’s not to say that rates will decrease next year. It’s just worth noting that increases in the coming months won’t be nearly as dramatic as they have been recently.
Property owners have an opportunity to tweak their marketing efforts to emphasize unique selling points for their properties. Highlight the value of rent at your property, rather than trying to adjust rates to compete. Focus on keeping your current tenants happy, since replacing a renter is the most expensive proposition for multifamily property managers.
The NAHB study forecasts continued confidence boosts in the next six months, including moderately increasing buyer traffic all over the continental U.S. That means it’s time for apartment owners to prep their teams for increased efforts to get new leases as multifamily prepares for leaner times ahead.
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