Rental Demand Slows Down During The Holiday Season, Don’t Be Alarmed! | Nexus Property Management® Franchise

16 April 2024

0 Views 0

SaveSavedRemoved 0

IS THERE A NATURAL CYCLE TO RENTAL UNIT DEMAND THROUGHOUT THE YEAR?

It doesn’t take over a decade in the rental real estate business and over a 1000 units under management to notice there are clear trends when it comes to rental property demand. If you’re an owner, leasing agent, or property manager and you’re wondering where the qualified tenants are right now, history shows that many potential tenants looking for a change of scenery go quiet in November and December.

WHAT’S GOING ON IN NOVEMBER AND DECEMBER?

Have you ever had a mosquito in your house in the late fall and found it incredibly easy to catch or kill? Although humans aren’t cold blooded insects, we still tend to move much slower when the weather turns colder and this helps explain at least part of the slow down in the rental market. Come the winter months, people are naturally looking to hunker down. To stick with the animal comparison, bears famously hibernate in caves, and we, well, at the very least we decrease the rate at which we engage in major changes.

But not everyone experiences cold in November and December and the same trends hold (although not quite as dramatically) across the nation. As Nexus clients in Arizona can attest to, the market slows down come “winter” in the Sunbelt too. The not so surprising reason is that this is also the holiday season. Thanksgiving primes us to focus on our families and the very next day Americans transition to the expensive consumer driven Christmas season. Although housing is always a priority, people’s attention is pulled toward their own consumptive needs and those of the people around them. We spend, spend, spend (Black Friday broke all spending records in 2023) and housing decisions fall by the wayside.

LEARN MORE: HOW NEXUS PHOENIX IS DIFFERENTIATING ITSELF FROM THE “LOCAL” COMPETITION

WHAT’S GOING ON IN JANUARY?

Nexus doesn’t manage any rental properties in Canada, the UK, or any other Anglo countries that celebrate Boxing Day, but just as is the case the day after Thanksgiving, our calendars orchestrate that pivot as we move on from the Holidays. Most notably, New Year’s marks a time of resolution and a focus on goals and big ideas. With that, year in and year out, there comes a resurgence in the rental property market when we turn the page to January. Starting the new year successfully often means upgrading one’s environment and this plays out as we see more competition for vacant units. People are optimistic, they are hopeful, and they are looking for change.

LEARN MORE: WHO IS PROPERTY MANAGEMENT FOR?

HOW UNIVERSAL ARE THESE TRENDS?

It should be noted that trends are just that: they are common patterns but they are by no means universal rules. People’s lives change for any multitude of reasons and there is always a market for quality tenants if you have a quality property to offer. On the flipside, it’s also worth noting that if a tenant is looking to move and move quickly during the Holiday season, this could be an indication that they are overly desperate for a new place, which could raise red flags. This timing should not be a disqualifier, but we recommend doing extra due diligence.

LEARN MORE: WHAT SHOULD HIRING A PROPERTY MANAGER COST?

WHAT SHOULD I DO IF I CAN’T FIND A TENANT DURING THIS TIME?

Normally, if you’re having a hard time finding a qualified tenant it is likely an indication that your pricing doesn’t align with the market. In those cases, decreasing your ask makes a lot of sense. However, in this case, and really at the heart of why we’re sharing this content, that’s not the best move during this period. If you’ve received additional feedback that hints at your pricing being off (i.e. potential tenants you’ve interacted with are renting cheaper properties, comparables are dropping their prices, etc.) a deduction might make sense. But more often than not, being patient is your best bet. If action doesn’t pick up by the second week of January, then go ahead and reduce your ask.

LEARN MORE: PROFESSIONAL TENANT PLACEMENT WITH NO STRINGS ATTACHED

WHAT’S THE REST OF THE YEAR LOOK LIKE?

As noted, January begins an upswing in rental activity and this sharp increase will typically hold through the spring. To come back to that poor mosquito you squished up above, the market heats up again come summer. And to qualify summer as best we can for our audience across the U.S., summer equals the end of the school year. Once the kids are out (be it May down south, or almost July in New England), families are on the move. Plan, and price, accordingly.

LEARN MORE: TURN REJECTION INTO MOTIVATION…THE POWER OF HANDLING ‘NO’

MOST POPULAR NEXUS ARTICLES THIS WEEK:

Mick Lefort is the General Manager of Nexus’ New Haven County Franchise Office and the Vice President of Operations for Nexus Property Management®, a National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.

Your Property, MANAGED®

The Real Estate Investing Authority®

Connecting You To Better Living®

You Could Own A Nexus Property Management® Office For Less Than You Think!