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New construction surge prompts landlords and property managers to provide more perks

SEATTLE /PRNewswire/ — Rental concessions—offers meant to entice tenants, such as free months of rent or free parking—are at their highest level in more than two years despite strong renter demand, Zillow’s latest data shows. That’s because property managers are now likely competing for tenants, as new, primarily upscale buildings from the recent construction boom enter the rental market.

About 30% of rental listings on Zillow advertised concessions in October, a surge that signifies a notable shift in the rental market. Within the past five years, concessions reached a peak in February 2021, with 36.7% of rentals offering incentives, coinciding with low renter demand during the pandemic. Those concessions then dropped as far as 19.4% in July 2022. However, the current rise comes as typical rent prices are nearly 30% higher than pre-pandemic levels, and annual rent growth just ticked back up after nearly two years of slowing down.

“The pandemic era’s increase in concessions was a direct response to decreased renter demand. Currently, we’re witnessing a different scenario where the demand for rental housing is high, but there’s been a notable rise in supply,” said Anushna Prakash, an economic research data scientist at Zillow. “To differentiate themselves from newer, potentially more amenity-rich apartment buildings, property managers are stepping up their game, offering more incentives to attract potential renters with a broader range of choices.”

Nationwide increase in concessions
Zillow data shows an astonishing 43 of the nation’s largest 50 metropolitan areas have seen a rise in rental concessions compared to last year. The most deal sweeteners are found in Salt Lake City, Utah, and San Jose, California, where more than half the rentals listed on Zillow in October advertised concessions.

Construction boom and its effects
This trend is especially pronounced in metro areas experiencing a construction boom. According to Fannie Mae’s Mid-2023 Multifamily Construction Update, markets such as Washington, D.C., Dallas and Austin are seeing more new developments, with Dallas and Austin having 74,000 and 66,000 new units, respectively, either recently completed or underway .

Zillow’s data reveals a similar upswing in concessions in those metros and others, including Phoenix and Atlanta, which are also among the top markets for new multifamily construction. This correlation highlights how the influx of new apartments is likely prompting housing providers to offer incentives to attract renters.

10 Metro Areas with the Largest Share of Rental Concessions

Metro	Share of Rentals w/Concessions	Year over Year (YoY) Change in Share of Concessions	Typical Rent in Zillow Observed Rent Index (ZORI)	YoY Change in ZORI
Salt Lake City, UT	54.4 %	26.5 %	$1,677	0.7 %
San Jose, CA	50.8 %	6.3 %	$3,260	0.2 %
Washington, DC	49.6 %	-1.2 %	$2,308	3.9 %
Charlotte, NC	47.6 %	20.5 %	$1,826	2.4 %
Minneapolis, MN	46.8 %	3.4 %	$1,647	2.7 %
Dallas, TX	45.9 %	17.4 %	$1,803	0.6 %
Phoenix, AZ	45.1 %	10.1 %	$1,902	0.6 %
Austin, TX	44.8 %	13.4 %	$1,813	-2.8 %
Nashville, TN	43.8 %	8.1 %	$1,896	0.9 %
Atlanta, GA	43.5 %	15.2 %	$1,925	0.4 %

Source: Zillow data

Diverse concession strategies across metros
Conversely, metro areas such as New Orleans (9%), Providence (14%), Miami (14%) and New York (15%) observed the lowest concession rates in October. This varied landscape suggests that property managers across the country are exploring different strategies as they gauge the effectiveness of concessions before potentially adjusting rental prices.

Zillow’s research, echoing the sentiments of economists and housing experts, highlights the fact that new construction and zoning reform are pivotal in enhancing housing affordability. The current trend in concessions, likely fueled by the spike in multifamily construction, is an interesting twist in the quest for affordability. It remains to be seen if the rise in concessions will translate to a significant drop in rent growth.

Zillow provides a clear and user-friendly platform for both housing providers and renters. Property managers can easily list concessions for their properties, while renters can find all available offers under the “Special Offers” tab on participating building detail pages, enabling them to make well-informed housing decisions.

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, great partners, and easier buying, selling, financing and renting experiences.

Zillow Group’s affiliates, subsidiaries and brands include Zillow®; Zillow Premier Agent®; Zillow Home Loans℠; Trulia®; Out East®; StreetEasy®; HotPads®; ShowingTime+℠; and Spruce®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

SOURCE Zillow

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Cyber Monday, the digital shopping extravaganza, has emerged as the Internet’s response to Black Friday. Traditionally held on the Monday after Thanksgiving, it initially aimed to rival the in-store deals of its brick-and-mortar counterpart. However, the retail landscape has evolved, and now both events often overlap. Yet, Cyber Monday retains its allure, with online sales soaring and social media playing a vital role in advertising. The convenience of mobile shopping has further fueled its popularity, allowing people to snag deals on the go. From tech gadgets to clothing and gift cards, Cyber Monday continues to captivate shoppers seeking holiday savings.

Black-Owned Company Develops “Hidden Diversity” Greeting Cards to Address Overlooked Consumer Market of the Cultural “In-between”

https://www.nationaldaycalendar.com/national-day/cyber-monday-monday-after-thanksgiving

FORT LAUDERDALE, Fla. /PRNewswire/ — Inflation is still driving prices on everything from groceries to holiday gifts, but a new Debt.com survey shows many Americans aren’t as concerned about sticker shock as they were last year.

Debt.com polled 1,000 U.S. adults about their holiday shopping plans. More respondents (60%) than last year (54%) feel they will spend more on holiday shopping this year because of inflation. Among those respondents, 3 in 5 (54%) say they will use credit cards to cover the cost of holiday shopping.

It’s an American tradition to go into debt over the holidays. Higher prices and FOMO can lead to more credit card use.

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It’s almost an American tradition to go into debt for the holidays. Leading up to the holidays the fear of high prices and ‘FOMO’ (the fear of missing out) runs deep,” says Howard Dvorkin, CPA and Debt.com chairman.  

Two-thirds (66%) of respondents are shopping earlier than last year. More than 1 in 3 (34%) started in November, and 15% started over the summer when inflation briefly dropped for the first time in two years.

Still, credit card debt increased 16.6% from just a year ago and Americans now owe over a trillion on their credit cards.

With average interest rates of more than 26% on major credit cards, and retail store cards at over 30% Dvorkin asserts, “Shoppers should ask themselves if they really need to buy gifts for everyone or instead, to buy gifts for a small core group of family and friends.”

About Debt.com: Debt.com is a consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, bankruptcy, and more. Debt.com works with vetted and certified providers that give the best advice and solutions for consumers ‘when life happens.’

SOURCE Debt.com