The markets absorption of multifamily properties dropped from new units 1,149 the year before to 800, although that total was still higher than annual figures from 2006 through 2009, according to Hendricks & Partners. The number of permits issued for new construction also dropped in 2011, to a level lower than the average for the past three years.
Average permit issuance is even further down when compared to the series of years ending in 2007, which the firm suggests may be a sign that the previously high absorption marks the end of a prior trend and the beginning of a new one as the market adjusts to post-recession conditions.
Rental managers and owners may have difficulty anticipating what conditions will prevail next year. Although absorption and occupancy fell and single-family home sales were also down, rents actually grew an average of 2 percent in the metro area. Additionally, employers are expected to add a significant number of new positions this year. Whether job growth will be sufficient to offset the current vacancy rate is uncertain.
Property managers often have a lot on their plates when on the job, from conducting maintenance to collecting rent to dealing with tenant concerns. During their time working, though, one industry expert states it’s imperative they maintain accountability for their actions.
Speaking at the National Apartment Association Education & Exposition in Boston, apartment industry expert Andrew Botieri stated it is important for property managers, among others in the apartment sector, take responsibility for actions at their properties. Doing so is essential to maintain order at a property and keep tenants happy.
However, property managers should also enjoy the work they do, Botieri said, noting that unhappy managers can lead to a variety of issues at their residences.
“If you don?t love what you do, what a disservice to yourself and your team because you’re not giving 100 percent,” said Botieri, according to MHN. He added that roughly half of the tenants at a residence where an unhappy manager works will ultimately leave that property for another.
Not only could disgruntled tenants be bad for business short-term, but in the long-term the ramifications could be worse, he added. Renters may choose to rent units at apartments where they know management is more amiable than at one with an unhappy manager.
According to a report by The Demand Institute, home prices will increase modestly during the rest of this year. Additionally, a 2.5 percent price bump is projected between now and 2014.
Though improvements in the overall economy, including consumer industries, are expected to contribute to these rises, the institute states the rental housing sector will probably be the main factor in price growth.
“In these initial years, the prime driver of recovery won’t be new home construction, but rather demand for rental properties,” said report co-author Louise Keely. “This is a remarkable change from previous recoveries.”
A return to health for the for-sale housing market could indicate a potential downslope for the rental segment in the next couple of years. However, property management companies and investors likely will see business remain high during the rest of 2012.