Learn more about how to avoid evictions by reading our full article, written by the experts at Rincon Property Management.
Rental property owners or those who are watching the rental real estate market know that it is normal for changes in the market to occur. Although these changes are common, they can still be cause concern for those with less experience or information. New landlords or rental property owners may be confused by changes, or be unsure of what to expect. Below we detail some of the key changes that you can expect for the remainder of 2022 into the first quarter of 2023.
The market is slowing
Right now, we are seeing the market slow down a bit. This can happen for a number of reasons, including expected seasonal changes. We often see the market slow during the fall and winter months as fewer people move during these times, with the COVID-19 pandemic as an exception.
Leasing times may be increased
Another factor impacting the market is a surplus of available rentals. There is less competition for each unit when there is a surplus in available rental units. With fewer people applying for the same units, it may take longer for an applicant to meet the requirements.
We saw this shift in the rental market before the onset of the COVID-19 pandemic. Prior to the pandemic, the market would ebb and flow. However, during the pandemic, the market was consistently at an all-time high. Now we are seeing the market return to a more fluid state.
A reduction in rental pricing
A key point to note about today’s rental market is that rental units are not being priced at the same rate they were a few months ago. If you price your rental correctly by monitoring the market, there will likely be increased interest in the unit. We always recommend being aggressive in rental pricing, but we find the best results are found when there is flexibility within the accepted rental range to accommodate market changes. What is an aggressive rate at the beginning of a season may not still be considered aggressive at the end of it.
Softening Sales Market
Although these changes are normal, they can happen for a variety of reasons. Today, the sales market slowed down dramatically. This means that homes are not selling as quickly as they were before, or for as much. Now, people are turning homes into rentals instead of selling them. This is generating an increased supply of rentals. This happens because of increased interest rates, which makes it more difficult to buy and sell houses.
While these changes are not preferred, they are a normal part of market changes. By responding correctly to these changes, you can most effectively advertise and lease your property at a price point that is competitive. We recommend trying to maintain a flexible perspective, whether the market is at a high or a low. Being able to make strategic changes and plan for slightly longer vacancy times can help rental property owners to feel they are best protecting their business.