Challenges Facing the Multifamily Industry in 2021, Winston Rowe and Associates
There is still plenty of uncertainty about what lies ahead for the multifamily industry in 2021.
By: Winston Rowe and Associates
With Congress' latest passing of a $900 billion stimulus relief package in late December 2020, unemployment benefits will include $300 weekly through March 31, 2021.
Additionally, the Center for Disease Control's recommended evictions moratorium was extended to January 31, 2021.
The development and distribution of Coronavirus vaccines provide some promise that life could return to normal sometime later this year.
However, with the pandemic still raging within the United States, necessary progress with the economy and employment has remained slow.
What exactly is the aftermath of COVID for apartment communities?
Property managers and owners should still remain on guard for potential vacancy crises. There are varying indicators hinting towards a busier period of migration. Many renters who had delayed their moves in 2020 may now be ready to go.
Some who were hit financially harder than others could opt for less expensive housing. Then there are the tenants who moved to an apartment for its proximity to their office who are now working remotely—they're certainly facing a dilemma of deciding whether or not it's worth keeping their current lease.
How should apartment communities react to the urban exodus?
Major cities, particularly downtown areas, were appealing places to rent because of their location. However, quarantine restrictions prevented renters from being able to socialize at the restaurants, clubs, arenas, and stores nearby. They also affected those tenants who chose to live in the metro for work.
When renters are unable to enjoy local features and attractions or have to work remotely, what's the point of paying expensive rental rates typical of downtown Class A properties?
It's understandable that many either couldn't sustain that cost of living or felt it was no longer necessary to pay for a lifestyle they no longer had.
Owners in this sector need to be creative and find new ways their properties could attract new residents and retain current ones.
Interest rates are really low at this moment, so the value of apartments could only go up. If selling is the best for you or your property, it may be time to start the process and take advantage of the reinvigorated market.
This article was prepared by Winston Rowe and Associates. They provide consulting and due diligence services for apartment building investors nationwide. You can contact them at https://www.winstonrowe.com
Winston Rowe and Associates