“All the king’s horses and all the king’s men couldn’t put Humpty Dumpty together again.” Most of us can remember this childhood poem which has important lessons and reminders. The winds of change are blowing powerfully since the results of the November 8, 2016 U.S. elections. As the financial markets adjust to the changes and uncertainties so will the housing and rental markets.
The rental markets have seen many consecutive years of growth and prosperity. I’m not suggesting that our industry is like “Humpty Dumpty,” but I want property managers to be prepared. First question: who will be tomorrow’s renters? According to The Zillow Group’s recent “Report on Consumer Housing Trends,” the answers may surprise you.
A trend in motion is likely to stay in motion longer than expected. The Zillow study attempted “…to gain a comprehensive understanding of the United States residential real estate market. They “… employed independent market research to conduct a nationally representative, online quantitative survey.”
Some of the trends likely to endure and shape the future of the rental housing market are:
• Most rental prospects (84%) use online resources to find an apartment, yet connecting with property owners or managers (62%) and referrals from family and friends (59%) are also common search activities.
• The average rental housing prospect contacts 4.7 apartment owners or managers during his or her search, and 53% consider property staff to be a useful resource while searching.
• The majority (61%) of apartment residents sign a one-year lease, while 14% rent month-to-month, 9% sign a lease longer than one year and 5% have no lease at all.
• Did you know that 57% of apartment residents are female, and that number may exceed 60% soon?
• Residents’ median age is 32 and median yearly income is $37,500.
• Millennials make up 56% of all residents, followed by Generation X (28%) and Baby Boomers (12%).
• Slightly more than half of apartment residents are Caucasian (52%), 19% are Latino/Hispanic, 17% are black/African American and 9% are Asian/Pacific Islander.
• 45% of residents are single, 35% are married and 20% are unmarried partners.
• Over half (51%) have a college degree—either a two-year, a four-year or a graduate degree.
• More than a third (35%) has a pet, that’s why you’ll want to read my recent article on this topic.
One of the certainties of life is change. Bubbles burst, Humpty Dumptys eventually fall off the wall, and demographics shift. Visionary property managers keep up with the trends and adjust accordingly.