Here we are again, staring at the same Trends We Foretold in Early 2023, observed in real-time Later That Year, and rehashed A Couple of Months Ago. Longer market times, fewer leads, and more rent reductions.
If this were a Netflix show, we’d click “Skip recap”.
But hang with us. Because it’s time to talk about what to do when things slow down.
In this update, we’re starting with three charts that tell the story of the softening rental market. We’ll then show you how your peers are adapting and share our suggestions on what to do next.
Let’s dive in, check out the numbers, and see what best practices can help you stay one step ahead.
Market Times Continue To Go the Wrong Way
Based on market times, this is the worst March rental market since the start of our records (2017). Compared to 2023 and 2022, this March’s market times were 5% and 36% longer, respectively.
Unfortunately, this isn’t new. Starting in June 2023, on-market times have remained historically high.
Leads per On-Market Periods Are Near Historic Lows
Leads per on-market period are another good indication of how active the rental market is. And here, the story is unchanged. In terms of leads per on-market period, this is the worst March we’ve ever seen (again, dating back to 2017).
Compared to 2023 and 2022, during March 2024, leads per on-market period were 8% and 24% lower, respectively.
Owners and Managers Still Playing Catch-Up
If you want something to celebrate about this market, this is the best we can do: For the first time in 17 months, we haven’t hit a record high in rent reductions.
In March 2024, rent reductions were 1% lower compared to March 2023.
Zooming out even slightly, this one percent year-over-year reduction is cold comfort. For every one of the past 17 months before March 2024, year-over-year rent reductions had increased.
And compared to March 2022, rent reductions in March 2024 were 47% higher.
How Your Property Management Peers Are Adapting
We’re starting to see what we believe are indications of property managers attempting to work with market conditions.
The first signal of this is that more listings are accepting pets. From 2022 to 2023, dogs were allowed in 12% more on-market listings. Over the same period, cats were allowed in 8% more on-market listings.
Similarly, more leasing managers are marketing their listings without screening questions.
Admittedly, the total change — from 2.8% to 4.7% — is not massive. But this represents a 69% jump in listings that don’t have pre-showing screening questions.
It’s important to note that this doesn’t account for identity verification — that part is not being skipped.
Leasing Skills and Best Practices Are (Or Should Be) Back in Style
There are too many headwinds to wait out this soft rental market: historic household debt, stubbornly high interest rates, increased competition from short-term rentals, the list goes on.
So it’s time to brush up on your leasing skills and implement best practices.
This means:
- Syndicating Listings and maintaining them so they 1) make it easy for prospects to self-schedule a showing and 2) show your properties in their best light.
- Optimizing Scheduling to Maximize Showings — whether you’re conducting self-showings, in-person, or a mixture of both.
- Using Targeted Messaging to nurture the leasing prospects that are most likely to convert into renters.
- Responding and Communicating Quickly with prospects on their terms, whether through text, email, or phone calls.
- Streamlining your Prospect Experience by reducing paperwork and automating follow-up to grease the chute for a smoother sales process.
- Tracking and Reporting on Listing Performance to inform strategic shifts when they’re needed.
Put simply, these are the best practices that will get you through these difficult times for the leasing market. And they’re the same best practices that, when this market eventually turns around, will have you perfectly positioned to maximize your rental revenue.
Ready To Find Your Mojo in This Market?
As it turns out, ShowMojo can help you with every one of the best practices listed above (coincidence? I think not).
If you’re not already a customer, sign up today or schedule a demo using the buttons below.
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