Though we are still a far cry away from the end of the pandemic that changed our entire world, the housing market has been a different story over the last year. While single-family homes have been flying off the market like hotcakes this past year, multifamily homes have become even more attractive to investors and homeowners alike. And, if you want to get in on the action, here are some multifamily housing trends predicted to dominate 2021.
1. More Investment in Multifamily Homes
The coronavirus pandemic has driven people out of cities and in the suburbs. And, investors have paid attention. According to CBRE, multifamily properties stood up well to the economic shifts during coronavirus — better than in other recessions. Demand for affordable multifamily rentals is expected to go up in 2021 as inventory remains low. Furthermore, CBRE predicts the U.S. multifamily investments to reach $148 billion next year. While that’s lower than 2019’s record level of $191 billion, it’s 33% higher than the 2020 estimate of $111 billion.
Development certainly dropped during the coronavirus pandemic and was on the decline. But, multifamily housing units have already been on the rise in 2021 and will continue on that trajectory. According to CBRE, many building projects started long before COVID-19 and will add an additional 280,000 units on top of the estimated 300,000 this year.
It’s not just big-time investors we’re talking about. Everyday folks may turn their apartment into investment rentals. One of the big trends of 2020 was the “Suburban Sprawl”. People moved out from the cities into the suburbs. After all, why not have more space if you’re going to be spending all your time at home? Even better, why not have your home pay you for living there?
For the same amount of money people spend on their rent in a shoebox apartment, they can pay a mortgage on a home while renting out their city-dwelling, ultimately helping them pay for their mortgage. Alongside this, millennials — who are coming of age now and making up the largest population of homebuyers — will undoubtedly be looking for opportunities like this.
2. Better-Than-Average Rent Amenities
Developers and owners of multifamily buildings will keep in mind that renters may continue spending more time at home. Large companies are keeping their workers at home for an indefinite period of time, and many have decided to stay remote altogether. Therefore, people who live in larger multifamily properties will want comfortable, safe, and tolerable places.
Smart Work-from-Home Design
Multifamily units will start to see amenities with smart design at the forefront. This might include more health and wellness areas like greenspaces to public-private hybrid spaces that cater to remote work with strategically-placed outlets in the apartments themselves as well as markets and bars in the complex.
Less Interaction with Residents
In light of the coronavirus pandemic, multifamily properties must be safe for dwellers in every sense of the word. Landlords and property managers can and should have less interaction with residents going forward, and most residents would properly prefer it stay that way. Of course, if they’ll be seeing less of their landlords, that doesn’t mean landlords are off the hook. They’ll be more inclined to use smart home technology that empowers them to monitor more from afar.
Pandemic puppy, anyone? The number of pet owners as of 2020 was projected to increase by 4%, leading to 71-million pet-owning households. Perhaps in 2021, we’ll see a trend toward more pet-friendly rentals.
3. Tech Cities on the Rise
You can’t talk about multifamily housing trends without talking about technology. Even though many tech workers have transitioned to remote work, the country is still in need of a tech-ready workforce. CompTIA released their Tech Town Index for 2020, which includes some apparent cities like Austin, Seattle, San Francisco and San Jose. But others were unsuspecting like Trenton, New Jersey and Huntsville, Alabama. As tech towns span out, that’s where we may see more multifamily units built.
And co-working spaces may follow suit as an amenity in these developments. In 2021, we’ll see more multifamily properties design more comfortable and functional areas for tenants who are working from home in these tech towns. Think conference rooms that people can work in while socially distanced and fast-internet packages that won’t slow down even with many people connecting at once.
Speaking of technology, 2021 will see a lot of technological integrations into multifamily properties overall. Smart-home technology is on the rise, and though people love a home with some history and charm, it’s all about modernity. Tenants will expect to have conveniences in their home, and will pay accordingly for those conveniences.
Best of all, if you are an investor, homeowner or property manager, you don’t have to stress about figuring out how to incorporate this technology into your multifamily units. Companies like PointCentral offer smart technology that can easily be integrated, with features like:
- Keyless locks
- Access control
- Smart thermostats
- Voice control
- Water management
Automating much of the property management tasks — that usually take away from the time you could be spending doing other impactful tasks — can be a gamechanger for you and for your tenants. Knowing that they live in a smart space that’s secure, and that you’ll be notified of any issues before they become an expensive repair, is a win-win.
Hana LaRock is a professional freelance writer covering topics in real estate, technology, business and travel. Her work has appeared on Apartment Therapy, CNN, REI, The Culture Trip, The Daily Beast and more.