Our friends (and partners) over at Zillow recently released their 2017 Consumer Trends Report. While the entire report is interesting and insightful, I highly recommend that every operations and marketing executive in this multifamily industry put some time aside to review the section, Renting in America.
We’ve enjoyed, and continue to enjoy, quite a run of performance in our industry. There’s still a lot of conversation around whether we’re still in the middle of this bull market or if we’re coming to an end. Zillow’s report provides some useful insights into the trends supporting performance.
Equally valuable is the focus on what today’s renter is looking for, the journey and approach they take in deciding where they’ll live, how they’re making decisions and how operators and marketers can better align with prospects and resident.
Here are three critical takeaways from the report:
Renters account for 37% of all households in America—or just over 43.7 million homes, up more than 6.9 million since 2005
In fact, Pew Research Center analysis of Census Bureau housing data shows that more U.S. households are headed by renters than at any point in the past 50 years (since 1965).
For those looking for data to support continuing strong market performance, there’s good news! Research from Harvard University’s Joint Center for Housing Studies shows that America’s rental population is expected to continue to grow through at least 2035.
Today’s rental market is also closely tied to two young and diverse generations: Generation Z (adults ages 18-22) and Millennials (ages 23-37). These two generations comprise the largest share of households renting in the past year at 64 percent combined. Why are younger generations less attached to the idea of home ownership?
For starters, there’s still post-traumatic stress from the Great Recession of 2008. Additionally, student loan debts are higher than ever, putting a massive dent in the bank accounts of young homebuyers and renters. As a result, it shouldn’t be a surprise that they would prefer monthly rent payments to the option of acquiring more debt by taking out a mortgage.
Rentals mean more flexibility—you can pick up and go when your lease is up. Also, remember that young people are working for the same company for fewer years, so the option to pick up and move might be especially attractive
A Gallup poll from a couple of years back shows that millennials do not pursue the goals of getting married and having children with the same immediacy of previous generations. With more young renters delaying marriage, they are under less pressure to make long-term commitments like buying a home.
Renters, in general, rely on online resources (83 percent overall, 88% for generation Z, 90% for millennials) to help them find a rental. Meanwhile, half or more turn to landlords (56 percent) or property managers (49 percent) as a resource during their rental home search.
It shouldn’t be too surprising that online resources are overwhelmingly popular, beating out all other sources (including friends and relatives, agents and brokers, and even property managers and landlords themselves). Consumer-based real estate apps like Zillow and Apartments.com have shown how easy viewing apartments can be. Not many renters, after all, are still leafing through newspaper classifieds in 2017.
Today’s renters are doing more research and conducting more of “the leasing journey” online. Prospects begin their “buying journey” on their own, often intentionally avoiding salespeople until (and only if) they absolutely have to do so.
Buyers consume content and utilize a multitude of resources to guide their educational and buying journeys. Marketers are adjusting by creating relevant content in larger and larger volumes. Today’s Zero Moment of Truth (ZMOT) is bringing new meaning to omnichannel communication and alignment.
On average, a renter contacts 4.5 landlords or property managers and submits 2.6 applications. Almost a third (32 percent) submit three or more applications,
The proliferation of online resources has enabled today’s renters to cast a wider net than ever before. As a result, they’re contacting more property managers and landlords on average and submitting more applications.
Your community now has greater competition than ever before, across multiple stages of the leasing journey. Think of how many listings viewed this means! If they contact 1 of every 100 online listings they view, that’s an average of 450 listings!
What’s more, the journey is short - so it’s crucial that you maximize the impact of your marketing effort. On average, renters spend around 2 1/2 months searching for their new home.
It’s time past time for multifamily marketers to step up their game to match the marketing approach of other high-ticket, high consideration purchases. Stop for a moment and compare the prospect experience between searching for your next car vs. your next home.
As renters spend more time and doing more research on the web, your online presence is critical to drive and nurture qualified foot traffic to your properties and to support the prospect through their decisions process.
This means you must - MUST - move beyond marketing your properties at a floor plan level. To separate yourself in this competitive world, and more importantly to align your marketing with the desires of your prospects, you need to start thinking of the world from a unit-level perspective, rather than just floor plans.
Unit level content is key to successful marketing. Unit level content is anything that's focused on the specific unit being marketed. It could be photos, descriptions (e.g., views, appliances, it faces the morning sun, etc.), virtual tours or just about anything that highlights the specifics about the actual unit to be rented. It’s taking the same approach multifamily professionals have on floor plan level data and bringing that to the unit level.
The bottom line is that the strong results we’ve seen over the last five years have every opportunity to continue for those operators that keep pace with the changing demands of today’s (and tomorrow’s) renters.