Regular readers will remember our newsletter in February where we Spilled the Beans on the Weak Start to the 2023 Rental Market. Based on more than half a million successful residential leases facilitated through ShowMojo, we made the following assertions:
- The pandemic-driven, white-hot rental market was over.
- The downshift in the market had caught many managers and owners by surprise.
- In 2023, “all manner of leasing best practices are going to become pretty critical for anyone who wants to continue to be the master of their market times”. (That’s straight from the horse’s mouth.)
Today, we’re back to double down on those very statements.
2023 Market Times Don’t Look Good
No, it’s not the rental apocalypse. Market times are almost as bad as 2020 in the teeth of pandemic-induced lockdowns. However, let’s remember that, while we were holding our collective breath through those months, the four horsemen never did come riding in. That’s the good news.
Here’s the bad news. Market times are 28 percent longer than they were at this same time last year.
Market times are also longer than 2021 (18 percent), 2019 (12 percent) and 2018 (5 percent). Does this rental season feel tough? That’s because, comparatively, it is.
Owners and Managers Are Still Catching Up
Ok, now we’re just blatantly repeating ourselves from February, but with better data. Rent reductions are higher than any time since 2017.
In this case, it’s even worse than 2020. Moreover, preliminary May data suggests that rent reductions could be running at a pace 50 percent higher than 2022 (and a jaw-dropping 66 percent higher rate than 2021).
What’s This All Mean?
Do those numbers sound like the rapid fall of horse hoofs? As much as we love to beat that metaphor, we don’t see it. This could just be the rough transition to a normal that short-term memories have forgotten. Or, perhaps, we’ll be landing somewhere that is a little less than (and just a bit tougher than) a historical normal. Even though we do wonder about the possibility of this outcome, it’s still no world-ender.
Nonetheless, if your team is overloaded and straining to address all those phone calls, emails, showings, and applications, we will hint at one thing that really could matter during the summer rental season.