That’s just one key data point from the second-quarter edition of the quarterly resident satisfaction and renewal intention report from Kingsley Associates and MFE.
Renter Satisfaction Remains High, but Renewal Intentions Are Lowest Ever
While overall resident satisfaction remains unchanged this quarter, with 76.7% of residents indicating their overall satisfaction is "good" or "excellent," renewal intentions have reached an all-time low. Only 51.4% residents this quarter responded that they "probably would" or "definitely would" renew their lease, down 0.9% from one year ago. Renewal intentions are increasing, however, in cities with high barriers to entry and high occupancy rates, such as San Francisco, where occupancy is currently 95.8%, and Washington, D.C., (95.7%), according to Axiometrics. This could indicate that residents in these cities are renewing their leases in part due to fears they won’t be able to find a new apartment given the constrained supply in these rental markets. San Francisco has seen the greatest increase in renewal intentions compared with a year ago, at 51.4%, a 2.1% jump.
All Renewal Decision Factors Grow in Importance or Remain the Same From 2015
Not surprisingly, rental rate and location both increased in importance from one year ago among residents who are unsure about their renewal intentions or are likely to renew their leases. Among residents who are unlikely to renew, however, rental rate and community management ranked as the top two factors figuring into the renewal decision.
Among residents who are likely to renew their leases, 72.5% said location was a factor, up 2.0% from a year ago. The importance of rental rate remained consistent over the same period, with 59.7% of residents indicating it as their top decision-influencing factor this past quarter, while location placed fifth on the list.
The importance of community amenities increased 2.8% from one year ago among all residents, and 14.9% of residents who are unlikely to renew cited their community’s amenities as a top decision-making factor.
A vast majority of prospective renters and current residents are using online sources to gather information and opinions about rental communities. A total of 34.1% of residents in the second quarter said they first heard about their community through an "Internet listing or advertisement," which represents an increase of nearly 3% from five years ago. While "Internet listing/advertisement" took the top spot, the impact of a "drive-by/walk-by" remained essential to the community-search process, with 31.2% of residents indicating this was the method by which they first discovered their apartment, an increase of 7.3% from five years ago.
Facebook, Yelp, and Google+ are the top three social media sites residents use to post their apartment ratings and reviews. Although Facebook has stayed atop the list over the past four years, only 12.7% of residents said they had posted a review on the site this past quarter, a decrease of 10.7% from four years ago. Conversely, Yelp appears to be gaining traction among residents seeking to post a community rating or review: 12.4% of residents said they had posted a rating or review on Yelp in the second quarter, an increase of 8.2% from a year ago. This trend suggests that Yelp may surpass Facebook’s popularity as a social media review site for renters in the near future.
The sentiment of residents’ online reviews trends positive: 56.0% of respondents said the review they posted of their community this past quarter was mostly positive, while only 12.8% said they wrote a mostly negative review. Even though mostly negative reviews were the least common of the three review sentiments, their frequency has increased by 8.8% from five years ago: In Q2 2011, only 4.0% of residents posted mostly negative reviews.'
Note: Kingsley Associates surveys over 3.5 million apartment renters annually on behalf of its clients. The findings reflect responses received between July 1, 2015 and June 30, 2016.