COVID-19 Lockdown Trends in Multifamily (Webinar Summary)

Lockdown was pretty crazy, right?! The data thinks so too…but will they stick moving forward?

Our friends at MRI Software hosted a webinar, Impact of COVID-19 on Multifamily – Part 2, and asked us to share some maintenance-related data points from lockdown and beyond.

We were stoked to participate and blown away by some of the data presented by MRI Software, G5, Landlord Web Solutions (now RentSync), Nexus Systems, & Zego. The following is a 4 minute review/summary of the 60-min webinar.

(PS – links to the webinar recording and full MRI Market Insights report are at the bottom)

Leasing Traffic

• A trend seen throughout the data, leasing is back to pre-pandemic levels (courtesy MRI).

• Analysis of inbound prospective renter calls indicate a shift in renter priorities from inquiries about availability & tours leading up to lockdown, to a post-lockdown focus on general property inquiries related to contact info, rent/payments, and emergency response protocols (courtesy G5).

• Another theme throughout the webinar, the use of technology to contact and interact with properties is up, both in tour requests and online applications (courtesy G5).

• Landlord Web Solutions offered some insight that they are seeing traditionally short-term rentals (think, AirBnB inventory) in Urban markets move to long-term rentals. This could create some additional competitive pressures in some urban markets.
• From an applications perspective, all segments (conventional, affordable & public) remain off pre-lockdown and 2019 pace (courtesy MRI)

• Consequently, Move-In’s are off annually and 36% off YoY for May…

• …and Notice-to-Vacates cancellations and Renewals are slightly outpacing 2019 as residents seem slightly more inclined to stay in their current apartment, a trend that experts expect to continue through 2020 (courtesy MRI).

Term & Pricing Trends

• The frequency of 12-month lease terms for New Leases increased 12% YoY in May…

• …and New Lease pricing is down 5% YoY; down 7% from pre-pandemic levels (courtesy MRI).

• Predictably, concessions are up from 2019, especially during lockdown months of March, April & May. Concessions on New Leases are expected to continue to surpass 2019 levels for the remainder of 2020 (courtesy MRI)

• Renewal pricing is also off 2019 pace, though only by 3% through May (courtesy MRI).

• Exiting lockdown, the market data is indicating a desire by Multifamily Operators to lockdown revenue in anticipation of a generally softer market through the balance of 2020 (courtesy MRI).

Resident & Property Behaviors

• Similarly to increases seen web search behavior in leasing, portal usage by residents to pay rent & enter service requests is up significantly (courtesy MRI).

• MRI and Zego are reporting a substantial increase in rent payments via credit card through April, May and into June

• Several factors are driving credit card usage including, mutual desire for a “touchless” rent payment transaction”, waived transaction fees for residents along with speculation that a portion of the resident population is becoming cash-strapped and starting to relying on credit.

• General Observations: COVID-19 has significantly stimulated Multifamily operators to increase adoption of currently available, yet under-utilized, technology like Online Leasing, Virtual Tours & Mobile Maintenance & Work Orders.

Maintenance Operations & Work Orders

• MRI & ServusConnect are reporting Resident-submitted work order volume was down 40% during lockdown, April being the peak of the trough.

• On-hold volumes were also up, but data through June show this backlog is clearing. This indicates that Multifamily Operators are lifting the “enter-for-emergency-only” protocols instituted during lockdowns.

• As noted, adoption of online work order submission methods were up considerably during lockdowns. This change in resident behavior has long-term positive implications for staff by reducing the number of call-in, walk-in, passer-by work orders they need to manually document and keep track of. This should result in considerable time-savings and improved record-keeping.

• On the same track of self-service, Residents became increasingly willing during lockdown to tackling repairs themselves, knowing that a technician could not enter their unit to fix a jammed garbage disposal, replace a lightbulb or HVAC filter. Many operators adjusted their procedures to enable remote assistance or leaving parts and/or tools at the resident’s door to facilitate a successful DIY experience. This is expected to be a lasting trend moving forward.

• As COVID-19 is not going away, operators are starting to view Mobile Maintenance as a necessity due to the inherent “touch-less” nature of the technology.

• There is some concern by multifamily operators that increased usage during lockdown, along with the massive uptick in work-from-home and remote learning, will result in long-term expense increases due to premature failure in mechanical equipment like garbage disposals, HVAC components, dishwashers, etc. because of increased daily utilization.

Vendor Spend & Make-Ready

• As anticipated, Make-Ready spending is down significantly from 2019. Nexus Systems is reporting their client base is off 77% from last year through mid-June.

• Vendor acceptance of electronic payment methods for services rendered is up 42% over 2019. This follows the the theme of increased digital interaction between residents and multifamily operators (courtesy Nexus Systems)

• Operators are expecting a surge in Make-Ready spending in the summer months and into the fall. Key drivers for this are said to be the expiration of eviction moratoriums and pent-up demand.