Apartment tenants are not moving out this time of year as normal patterns would dictate due to the impact of COVID-19, according to an article from RealPage.
“We are seeing a huge spike in rescinded non-renewal notices,” Jay Parsons writes in his blog. “This occurs when renters who previously intended to move out change plans and decide to stay put. Compared to the same time last year, rescinded notices have nearly doubled.”
The U.S. apartment industry has seen an unusual surge in retention rates. This is counter to the normal seasonal patterns. So managers are seeing more rescinded notices, more month-to-month leases, and more renewal demand, Parsons says.
“As property managers have these conversations with renters, they’re finding many want to stay put, but only for the short term while they wait out COVID-19,” Parsons said. “Apartment managers are providing unprecedented flexibility to help them out.
“But they’ve also gone even further. In some cases, they’ve allowed renters to remain in units that were already leased for a future date by a new resident – leading to a scramble to then re-sell the new renter on a replacement unit. Many have waived premiums for month-to-month leases or other short lease terms,” Parsons says.
He cautions this all means a summer leasing season with “heavier exposure and lighter new-lease demand than we would typically see in a normal summer.
“Lease-expiration management becomes more critical now than ever. Under normal circumstances, you would offer big premiums for short-term leases to help stagger expirations. That may not be an option right now for property managers concerned about both optics and the reality of taking care of residents in need.
“Even without short-term premiums, though, you can certainly incentive longer-term renewal commitments,” he writes