The last few years in multifamily have been better than ever, but as the industry continues to climb, many are starting to look for the first signs we’re reaching the peak. To help you keep an eye on the market, Kingsley Associates and MFE are partnering to provide you with a quarterly update on resident satisfaction and renewal intentions, both across the country and by market.
Here, we're starting off with Q1 2016, where we're noticing things are still rosy, but not as bright as they used to be.
Overall Resident Satisfaction Remains Steady Despite Decreases in Renewal Intentions*
At the national level, overall resident satisfaction remains consistent this quarter, with 76.7% of residents indicating that their overall satisfaction is "good" or "excellent". However, renewal intent has continued to decline since 2013. Only 51.5% of residents this quarter responded that they "probably would" or "definitely would" renew their lease, which is a new low.
Chicago renters indicated the largest increase in satisfaction, with a 3.1% increase since last year. Since Q1 2015, all eleven of the major US markets analyzed have undergone decreases in resident likelihood to renew. While Chicago saw the greatest increase in satisfaction levels, renters in this metro are less likely to renew their leases in 2016: just 54.4% of Chicago residents expressed that they would likely renew their lease, down 4.7 percent from last year. The metro with residents who are the least likely to renew their leases this quarter was Denver, with only 47.9% of renters stating their intent to renew, down 3.2 percent over the same time period.
Rental Rate and Location Increase in Importance from 2015*
In terms of what renters are considering in their decision to renew or not, rental rate and location both increased in importance from last year, regardless of whether residents are unlikely, unsure, or likely to renew their leases. 56.4% of respondents indicated rental rate was a primary renewal decision factor, up from 55.3% in Q1 2015. 53.1% of respondents cited location as a renewal decision factor, up from 50.6% in Q1 2015.
Among the residents who were likely to renew their leases, 72.2% indicated location was a factor, up from 70.4% in Q1 2015. For residents who are unsure or unlikely to renew, rental rates are particularly important, with 66.1% of unsure residents and 59.8% of unlikely residents indicating that rates were a factor in their decision. Location also increased in importance for unsure and unlikely respondents, but still fell well behind rental rates.
Top Apartment / Community Features
The National Multifamily Housing Council (NMHC) and Kingsley Associates partnered to survey over 500,000 residents in 45 states across the US regarding their apartment rental experience. As a follow up to the inaugural survey initiated in 2013, the 2015 NMHC / Kingsley Renter Preferences Study shines light upon nearly 120,000 apartment residents' perspectives on nearly 70 different apartment features and community amenities.
High speed internet access generates the highest level of interest among renters, with 94% of respondents indicating its importance at a 4 or 5 (on a 1-5 scale). While residents' interest in a patio / balcony remains high, their interest in walk-in closets, soundproof walls, and smart thermostats is even greater. Residents also expect higher monthly costs for some of these desired features. Per the Renter Preferences Study, residents expected higher monthly costs for an apartment with soundproof walls ($62) and washer / dryer in unit ($64).
Among community amenities, residents indicate that they are most interested in parking (94% of respondents) and a pool (83% of respondents). Residents expect to pay the most for a pool, with an expected monthly cost of $46. Three of the top ten community amenities of greatest interest to residents are related to sustainability (recycling, green certifications, and green initiatives).
*Note: Kingsley Associates surveys over 3.5 million apartment renters annually on behalf of its clients. The findings marked above reflect responses received between April 1, 2015 and March 31, 2016.