Apartment Software Firm Sees Drops in Applications, Traffic

Apartment prospect traffic and applications dropped in July following the recent surge in pricing, according to the latest Market Insights report from MRI Software, a property management software for the industry.

“The resulting increase in vacancies has, in turn, eased upward pressure on pricing,” the company said. “Although the average price of a new 12-month lease declined between June and July (from $1,830 to $1,818/month), pricing is still well above the $1,744 average from January through May and represents a 20% increase from July 2021.”

March represents the top-performing month for apartment operators, according to the report, and traffic uncharacteristically diverged in the summer months. 

For July, applications were at 76% compared to March and traffic came in at 80% of March. Move-in volume rose in July compared to June, but was low compared to that month in 2021.

No Slowdown in Some Boston Markets

The Procopio Companies hasn’t seen the typical summer slowdown.

“Although we’re in August, which traditionally sees limited apartment interest given travel, we’ve seen traffic remain steady at our properties,” Deidre Raimo is Procopio’s Asset Management Associate, tells GlobeSt.com. 

“We’ve also found that with potential residents who tour our properties, there’s a high rate of closing on an application, somewhere around 80%, demonstrating the quality of the leads we are obtaining.

“Within unit makeup, we’re seeing a consistently high interest in one-bedroom and studio units, particularly in the urban core, and Greater Boston suburbs, with greater traffic seen at properties outside the city compared to downtown. As you move further into the suburbs, we see an increased interest in two- and three-bedroom units.”

Urban Chicago Stays Strong YoY

Likewise with Aysha Hackert, partner and director of professional development at Chicago-based Downtown Apartment Company, who works with over 300 buildings in and around the city’s central business district. “We have not really seen a slowdown in applications compared to this time last year,” Hackert tells GlobeSt.com. 

“We continue to see high renewal rates in our market, which limits the supply of available units while further driving up demand. We expect a more traditional rental market this fall with the timing of new apartment inventory coming online.”

MRI Suggests ‘Dampening Demand’

“Today’s multifamily market demonstrates what many of us learned in Econ 101 – that when prices rise demand drops,” Brian Zrimsek, Industry Principal, MRI Software, said in a prepared statement.

“Tight occupancy led to rising prices, but now we’re seeing dampened demand, which, in turn, is leading to reductions in pricing. Other factors, such as inflation and low rates of unemployment, are also having an impact on market conditions. But at a fundamental level we’re looking at the basic laws of supply and demand.”