By Jack Stubbs
Regionally and nationally, the rental market is constantly in flux. Several online platforms provide users with the ability to track rental options currently on the market. RENTCafé is one such platform, offering clients the ability to track and find available rental apartments in real time, submit rental applications and receive approval notifications on rental properties.
On October 17th, RENTCafé released a study about the U.S. Renters’ Profile with census data gathered between 2009 and 2015. We spoke with Nadia Balint, real estate writer for RENTCafé, about some of the key findings from the report, and what these findings reveal about demographic and generational trends driving Seattle’s rental market.
Can you elaborate on some of the key findings from the study? What do you think accounts for some of the widespread changes in the renter profile from 2009 to 2015? Were there any statistics that were particularly surprising or unexpected from the Census data?
Our study looked at changes in renter population between 2009 and 2015 by age group, education level and family type. We found that the fastest growing segments of the country’s rental population were those aged 55 and over (who increased by 28 percent nationally), those who hold a bachelor degree or higher (who increased by 23 percent nationally), and families with no children in the household (who had an increase of 21 percent nationally). The three segments that registered the highest jumps all point to Baby-Boomers, a generation that is increasingly choosing the renting lifestyle. The industry has been talking about catering to older demographics of renters for a while now, but it was surprising to see such a large net increase of 2.5 million new senior households.
What do you think accounts for the significant increase in senior renters within this time period? What other large-scale trends does it represent demographically? Generationally?
Empty-nest baby-boomers are reaching a point when they want or need to downsize, to save on housing costs, while maintaining a quality lifestyle. Rentals can offer less maintenance, more services and more amenities to make their lives easier as they’re aging. According to the AARP, nine in ten older Americans want to stay in their homes as they age. Well, that home doesn’t necessarily mean “owned” – it can as well be a rental in an apartment community where residents can socialize with others and be close to shopping, dining and public transit.
Generally, the current perception is that millennials are moving to Seattle in droves, and looking to buy/rent to establish themselves here. However, the study found that there has been a significantly larger number of Baby Boomer renters than Millennials. Given that this statistic reflects data gathered from 2009-2015, does this trend still hold today and how will it change over the next decade? What is the current data showing?
Millennials account for the largest number of renters in Seattle overall. However, the largest gain in renter population during this time period was from renters over the age of 55 in both percentage increases and net numbers. At this rate, the increasing number of senior renter households are gaining attention in Seattle and around the country, especially from apartment developers. As the population continues to age, we expect that the trend will continue and these renters will have even more housing options in the years to come.
Let’s talk educational context. What accounts for the significant increase in educated renters moving to Seattle (28 percent increase in renters with a Bachelor Degree or higher and 15 percent increase in college grads). Generally, Seattle is viewed as a younger city, demographically. What are some of the factors that account for for the attractiveness of the city for recently-graduated individuals?
For a healthy job market like Seattle, highly-educated renters are the norm. More and more young professionals are choosing to rent, not only for the flexibility of renting, but also for the experience-based environment that today’s rental communities offer. What makes Seattle attractive is the fact that it is an opportunity-rich city for recent graduates, with a solid local economy and plenty of big name employers to choose from.
Can you expand upon the intensive urban growth occurring in Seattle (growth that is outpacing every other city in the nation)? Does this trend show any sign of slowing, or is an indication of further things to come?
High demand is what drives growth and construction in the area. With over 10,000 new units expected to be delivered by the end of 2017, Seattle is in the top 10 in the country. As long as the job market can sustain this growth, we would expect to see more rentals and rising prices in Seattle, but likely at a slower pace.
What about the bigger picture: how do trends in Seattle reinforce or contradict nation-wide trends—generally, demographically and otherwise? To what degree is Seattle an anomaly, given the rest of the data collected nation-wide?
Unlike other large pricey cities in the country, like New York, Boston, Washington DC, Houston or San Francisco, which have seen rents cooling over the last year, Seattle’s rental market continues to grow at a fast rate, posting a 7.3 percent price increase y-o-y. In terms of demographic changes, Seattle’s large increase in older renters is fifth in the county, behind 4 popular warm-climate markets: Riverside CA, Tampa FL, Phoenix AZ and Dallas TX.
Given that this Census data was collected between 2009 and 2015, what do you expect moving forward in terms of rental versus buyer trends, and demand versus subsequent volume constraints on the housing/rental inventory?
We expect this demographic shift to continue as the population ages and the rental market to respond with more age-restricted developments and more apartments catering to the needs of Baby Boomers.
What are some of the challenges involved in gathering this data, given that the housing and rental market is such a dynamic and ever-changing sector? How do you ensure that your data reflects current trends?
The study is based on the most recent Census Data available. We constantly monitor, update and conduct new studies on an ongoing basis to stay ahead of the curve. Also, our analysts at RENTCafé work with data from Yardi Matrix, an apartment market intelligence source which researches and reports on all multi family properties of 50+ units. Their database covers no less than 14.7 million units across 124 markets in the United States. Our greatest advantage is that we work with actual rents, surveying properties on a regular basis, not just current listings.
For potential renters, what’s the most important aspect of a property (i.e. unit features, location, proximity to transit, price, etc.)? How variable is this?
This depends very much on individual preferences. Price and location are usually among the main criteria, but renters have become more sophisticated and are looking for quality finishes, lots of amenities, eco-friendly features and pet-friendly buildings.
Baby Boomers look for certain benefits in rentals: low maintenance is a top priority, but also convenience – being close to the places they frequent most, shopping, dining, arts and entertainment. They also value quality and comfort inside their rental home, as well as living in a community that offers plenty of opportunities for socializing with other residents.