From an affordability crunch to an influx of multi-family developments, find out what’s happening in real estate this summer.
Did you know that there’s really no such thing as a “national” real estate market?
While broader macroeconomic trends, like the Federal Reserve’s fight to cool inflation and supply chain disruptions that affect housing starts, can certainly impact the real estate industry as a whole, the truth is that the “national” real estate market is simply the sum of its smaller parts.
Each local real estate market can respond to the same events in different ways. Take Florida, for example. According to recent data, Miami’s housing inventory is about 50% less than it was pre-pandemic. But just an hour and a half away, the market has 50% more inventory.
Two markets that are barely 100 miles away from each other can be dramatically different.
But how does this perspective affect trends in property management (PM)?
Read on to find out.
A Summer Full of Accidental Landlords
So far, the summer of 2024 is proving to be atypical.
First, there’s been a sudden rise in “accidental landlords,” or those who’ve suddenly found themselves managing a rental property because they’ve either unsuccessfully tried to sell their home, had to relocate for work, or inherited a property they don’t want to live in year-round.
Rentals are also spending longer periods of time on the market, forcing landlords to rethink expectations and consider price-adjustment plans.
Typically, summer begins with no shortage of market momentum as school lets out and more buyers make an entrance. But this year, these accidental landlords have been stuck on the sidelines thanks to economic uncertainty and are forced to consider selling to try and break even, continuing to rent out their property, or taking a credit hit with a short sale or foreclosure.
Investors are buying fewer properties, too. The majority of property management business is coming from investors with underperforming management companies looking to transition to something better.
However, investors looking to make that transition provide a golden opportunity for PMs. Now is the time to revisit contacts from years prior, check in on how their current property management solution is doing, and guide them to a better solution should they require it.
Maybe those investors have had to absorb losses from excess vacancies and fewer renewals, or maybe they just don’t like how their current property management company does business.
Either way, now is a good time to strike.
Responding to the Affordability Crunch
Affordability continues to evade the majority of the market. Property management companies and property owners are being forced to find new growth strategies with creative, outside-the-box thinking.
