Multifamily Housing Predictions for 2024
6 Min Read
Written by: Parcel Pending
The new year is the perfect time to assess where the market is and, more importantly, where the market is heading. Below is our list of multifamily housing predictions for 2024.
State of the Market: A Surplus of Rental Units
Between 2021 and 2022, rental rates for new leases surged more than 20% and vacancy rates hovered around 6%.1 Now, the picture is much different. December 2023 closed the year with monthly rents declining 1.1% and an increasing supply of rental properties thanks to new construction.2 In fact, almost 440,000 multifamily units were completed last year, and it’s expected that another 671,000 will hit the market this year.3 Plus, with high mortgage interest rates finally falling, more renters could switch to buying, adding to the surplus of properties on the market. The net result of this shift is that the battle to attract and retain residents is on.
Leverage Amenities Appropriate to Your Demographic
As you compete for residents, ensuring your amenities match your target market demographics is critical. For example, a community with numerous Millennials working from home will have different needs than a multifamily community for seniors. Seniors are inclined to favor a building with more robust security features. And, as Elie Rieder, CEO of Suffern, N.Y.-based Castle Lanterra Properties, discovered, her senior residents wanted communal activities rescheduled to better meet their lifestyle needs.4 Millennials and Gen-Zers, on the other hand, like amenities that make life easier, including shared workplaces and well-appointed fitness centers.
Decisions should also be based on residents’ income. A community with lower or moderate rents will serve different needs than one positioned as luxury housing. Another crucial factor is the location of the property. Offering designated parking spaces may entice residents in neighborhoods with sparse parking.
Highly Used Amenities = Best Amenities
Although a putting green sounds impressive, amenities that serve the largest percentage of residents with the most frequency tend to have the most significant impact on resident retention. These new “standard amenities” are essential to residents’ overall positive experience and daily needs and are no longer optional. High-speed broadband internet, on-site (or in-unit) laundry facilities, and package management solutions are now considered standard amenities.
Secure Package Management is Key
The value that residents place on secure, on-demand package management solutions – particularly lockers – cannot be understated. According to a recent National Apartment Association announcement, residents now rank “secure package receiving options” as their most important amenity.5 And, after ranking third in a 2022 NBRI study of apartment residents, parcel lockers jumped in 2023 to the second most crucial amenity – just after secure parking. Respondents to this year’s NBRI survey cited security, accessibility, and speed as their top reasons for ranking lockers so highly.
Reliable Wi-Fi All the Time
Every resident needs access to the internet but, according to Parks Associates, of the more than 30% of Americans who live in apartments and other multifamily housing, 50% say they have network problems.6 Furthermore, setting up service with neighborhood internet providers can be costly, time-consuming, and difficult for homeowners to maintain their own equipment. Providing managed Internet service is turning out to be a top way to attract residents; 9 out of 10 residents won’t even consider a property if the service isn’t reliable.
Embracing Smart Tech
- Smart Locks – Residents have witnessed the adoption of smart locks in hotels and single-family homes around the country. Embracing a keyless entry system translates into a boost of confidence, knowing fewer copies of the keys to their homes are circulating.
- Smart Thermostats – Thanks to the national introduction of Nest, residents today want the convenience of accessing and controlling their heating and air conditioning from their smartphones. Setting various temperatures for daytime, nighttime, or when away assists with energy efficiency.
Outdoor Space is the Issue
Balconies and outdoor space are hotly requested amenities for apartment communities. For CGI Strategies, a California-based real estate investment and development company, 90% of their new projects now include balconies, up from 70%.7
We’re also seeing demand for outdoor communal space including communal living spaces. Markwood, a real estate investment company based in California, is using one clever marketing tactic. It promotes an “outdoor living room,” which is a covered terrace or area with balcony walls on three sides that shield occupants from the heat and rain while enabling them to work or host outside activities for guests or children.
According to research, building a roof deck increases the property’s value and draws and retains residents. In addition to improving the property’s aesthetic appeal, lush landscaping lowers heating and cooling expenses by acting as a natural insulator. For instance, some property managers in New York are introducing mobile furniture and reusing cabanas as outdoor classrooms to add flexibility to their outdoor areas.
Create Purr-Fect Pet-Friendly Features
Pet-friendly rentals are shown to be a competitive advantage, according to research. What can you do to improve your home’s suitability for four-legged friends?
- Designated Recreational Area: Setting up a dog park at your community offers canines a break and provides safety for residents. Additionally, sections of outdoor areas, such as rooftop decks, can be set aside for dogs.
- Incorporate Pet Grooming Services: Upscale rental facilities can collaborate with dog walkers and groomers to improve pet and owner happiness.
- Create Pet-centric Activities – Allow your property management marketers to get creative here. Options include pet adoption days, look-like-your-pet contests, best-pet photos via social media, etc.
- Implement Pet Rules – As much as adding pet amenities attracts residents, there must also be rules and penalties for inconsiderate pet owner conduct, such as failing to pick up pet waste or permitting excessive barking or violent behavior from pets.
Flexible Work Areas
In addition to their apartment unit, residents are looking for another space in the building to work. Astute property managers are setting up co-working areas, meeting rooms, and private offices. Naturally, amenities like extra outlets, desks, charging stations, Wi-Fi in the lobby, and attractive task lighting are essential to the apartment experience.
Every community has its unique needs and resident preferences, but one need prevails above all others: package management. Whether it’s new furniture for their patio, supplies for their home office, or Fluffy’s dog food, residents are ordering online – and frequently. In fact, 90% of residents who responded to this year’s NBRI survey reported receiving between 1-10 packages per week.
Smart lockers are a safe, secure amenity that is most requested by residents and most often used. Available 24/7/365, lockers can take your leasing staff out of the package management business and return them to their core business of attracting and retaining residents.
Ready to implement the most important amenity for residents this year? Contact a Parcel Pending sales representative today to get your community’s custom smart lockers.
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- Parker, Will. Apartment Rent Relief Is Expected to Continue in 2024. www.wsj.com. January 2, 2024. https://www.wsj.com/real-estate/apartment-rent-relief-is-expected-to-continue-in-2024-9acf43d1
- Stribling, Dees. As Supply Swells, Apartment Rents Dip and Investors Drop Out. www.bisnow.com. January 4, 2024. https://www.bisnow.com/national/news/multifamily/as-supply-swells-apartment-rents-drop-122284
- Serlin, Christine. RealPage: Apartment Supply Surges to Highest Levels in Decades. www.multifamilyexecutive.com. January 5, 2024. https://www.multifamilyexecutive.com/business-finance/business-trends/realpage-apartment-supply-surges-to-highest-levels-in-decades_o
- Ballinger, Barbara. What Residents Want–and Why. www.naahq.org. January 1, 2024. https://www.naahq.org/what-residents-want-and-why
- National Apartment Association. 5 Key Consumer Preferences of Renters. www.naahq.org. April 26, 2023. https://www.naahq.org/5-key-consumer-preferences-renters
- Womack, Mike. 5 Ways Managed Wi-Fi Drives Value for Multifamily Properties. www.naahq.org. June 15, 2023. https://www.naahq.org/5-ways-managed-wi-fi-drives-value-multifamily-properties
- Kalinoski, Gail. How Will the Pandemic Impact Future Apartments?. www.multihousingnews.com. August 5, 2020. https://www.multihousingnews.com/post/how-will-the-pandemic-impact-future-apartments/