SOLON, Ohio (MO.Properties) – Despite ongoing economic instability and a rebound in new lease-term pricing, occupancy in market-rate housing has remained at higher levels than last year. The latest report from Proptech firm MRI Software (“MRI”) identifies two reasons for this trend: 1) continued concessions from landlords, which hit a new peak for the pandemic in November, and 2) tenants’ shifts toward smaller units.
The firm’s newest report compiles data from more than one million market-rate units (a subset of the total units managed by MRI clients) in January-November 2020 and January- November 2019. Analysis includes both year-over-year and month-over-month comparisons.
Data from recent months suggests that many tenants moved from single-bedroom units to studios (in an effort to downsize) or to two-bedroom units (consolidating households to share costs).
Concession values, as noted earlier, reached a new peak in November.
New lease-term pricing in November rebounded close to November 2019 rates.
Move-ins outpaced move-outs for the fifth consecutive month.
“For this report, we decided to break down moves and transfers by unit type, and that has cleared up some pieces of the puzzle,” says Brian Zrimsek, Industry Principal, MRI Software. “The National Multifamily Housing Council’s Rent Payment Tracker has shown generally strong rates of rent collection since the onset of the pandemic, which, at least initially, could be attributed to government stimulus packages. But our report indicates that tenants may be moving to smaller or consolidated units for budgetary reasons.”
He adds: “The ‘downsizing’ trend also helps to explain the recent uptick in new lease-term pricing, which is only partially offset by concessions.
“Overall, the stats tell a positive story. They demonstrate that tenants are doing their best to be financially responsible. Meanwhile, the high occupancy rates are helping landlords survive the coming months before an economic recovery takes hold.”
About MRI Software
MRI Software is a leading provider of innovative real estate software applications and hosted solutions. MRI’s comprehensive and flexible technology platform coupled with an open and connected ecosystem meets the unique needs of real estate businesses – from property-level management and accounting to investment modelling and analytics for the global commercial and residential markets. A pioneer of the real estate software industry, MRI develops lasting client relationships based on nearly five decades of expertise and insight. Through leading solutions and a rich partner ecosystem, MRI gives organizations the freedom to transform the way communities live, work and play while elevating their business and gaining a competitive edge. For more information, please visit mrisoftware.com.