SOLON, Ohio, June 15, 2020 /PRNewswire/ -- The COVID-19 pandemic continued to impact the U.S. multifamily market in May, reflected in lower lease pricing, expanded use of credit card payments, increasing traffic and a tendency among residents to stay put, according to MRI Software ("MRI"), a global leader in real estate software solutions.
The firm's latest report compares data from more than one million market-rate units (a subset of the total units managed by MRI clients) in February-May 2020 and February-May 2019.
Key findings, which will be discussed in a webinar on Thursday, June 25 at 2 p.m. EDT, include:
- Lower prices: Pricing for new leases of 8-14 months decreased by 5% in May 2020 compared to May 2019. Last month's pricing is also 7% lower than that of February 2020.
- Traffic is rebounding, but applications and move-ins are not. Traffic year-to-date has recovered to 101% of the same period in 2019, yet renters are generally staying in place at a greater rate compared to 2019.
- Wider use of credit cards for rent payments: Card usage in May was 58% greater than that of February 2020.
- Increase in 12-month leases: New 12-month leases were up 12% in volume in May 2020 compared with May 2019, and 12-month renewals were 7.4% higher in volume year-over-year.
"Some of these findings are expected in the face of uncertainty and recessionary thinking," says Brian Zrimsek, Industry Principal, MRI Software. "And while we applaud the use of electronic payments, which bring convenience to renters and landlords alike, the use of credit cards could signal increased risks if residents are paying with cards because of restricted cash flows as opposed to a desire to accumulate reward points. Many landlords have waived the fees for credit card usage, so it's difficult to know the motivations for this behavior change.
"Other findings are more encouraging," he continues. "Although many residents are choosing to stay where they are, the rise in traffic indicates that moves and applications could increase as the economy stabilizes. And the increase in 12-month leases shows that landlords are thinking strategically, ensuring that lease terminations coincide with what will likely be a busy season in 2021."
The full report can be downloaded here.
Zrimsek notes that rates of unemployment and the government's response, e.g., enhanced unemployment benefits and stimulus packages, will play a major role in future market developments. Recent data from the National Multifamily Housing Council's Rent Payment Tracker continues to be positive: 80.8% of apartment households had paid June rent as of June 6, 2020 – only a 0.7-percentage point decrease from June 6, 2019.
"Real estate executives talk about 'unprecedented times' and 'unchartered waters' and how hard it is to make informed predictions about market developments," Zrimsek adds. "That's why data and analysis are so important. The more indicators we track; the more tools we're giving industry decision-makers as they position themselves for a recovery."
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.
(US for MRI)
Rachel Antman (+1 212-362-5837)
(UK) Platform Communications for MRI
PJ Chou (+44 20 3219 5837)
Zoe Mumba (+44 7725 832393)
or Hugh Filman (+44 7905 044850)
SOURCE MRI Software