According to Redfin, the typical U.S. asking rent passed $2,000 for the first time in May, and in Manhattan rents are skyrocketing to as much as $5,000 a month as COVID-era concessions go by the wayside.
Unexpected price tags overnight that just keep increasing keep rent a mainstream conversation, but what do renters think about the highest rent prices in recent years?
We used our own social listening technology and applied natural language processing to comb through customer ratings and reviews to see what renters think about rent price and their housing providers, or landlords.
Why Did Rents Soar This Year?
These factors are playing a big role in driving rent increases:
- The housing market is topsy turvy. The roller-coaster housing market has triggered rent spikes for different reasons. In 2021 and early 2022, the demand for home buying new homes increased so greatly that demand outgrew supply and caused the cost of homebuying soared. Would-be homebuyers turned to rentals when they couldn’t afford to buy. In turn, this caused an increase in demand for rentals. The housing market then received a jolt when mortgage rates started to spike throughout 2022 causing would-be first-time home buyers to postpone their purchase – keeping them in rental properties, which also contributed to an increase in rent.
- People are returning to cities. After fleeing major metropolitan areas such as Miami and New York as COVID-19 settled in, many people are moving back to major cities. The spike in demand is causing rents to increase, particularly in Miami and New York.
- Pandemic concessions are over. Due to increased demand, property managers are no longer offering concessions once needed to fill open rentals that were imposed during the height of the pandemic.
- Institutional investors are changing the market. To make the housing market even more competitive, institutional investors are buying a record share of U.S. houses.
Housing costs will likely not go down anytime soon. According to a national survey, 69% of respondents say they expect rent prices to continue to rise at a near-record pace. On average consumers expect rent to increase by 7.1%.
Rent Price Discussion on Social Media
Our social listening platform analyzed adjectives trending on social media when it came to rent prices. We looked at data from around December 2021 through July 2022. The top word used to describe rent prices was “expensive,” mentioned more than 48,000 times over that period on Twitter. Digging into those mentions showed consumer’s frustrations and fears over the rising prices of rent.
I’d like to know why I can’t get a mortgage yet my rent is more expensive that a mortgage would be.
— David Harrison (@davidiharri) July 20, 2022
My landlord had told me he planned to increase my rent 11% but has decided instead to increase it 25%. Has anyone considered passing some kind of law about this
— Seth Pollack (@sethmpk) July 13, 2022
However, when we tightened those search filters to reexamine the conversation through the lens of March 2022 to July 2022, mentions of the word “expensive” dropped by more than half, to approximately 20,000. While the topic at hand may be taking somewhat of a backseat to other topics in the news, increased rents are still problematic for consumers during this looming economic downturn..
Property managers who charge consistently high rents face a challenge to their reputations — especially because half of renters surveyed by Reputation are considering moving to a new property.
So how should property managers deal with the issue?
How Property Managers Can Help
Property managers have the opportunity to look at the issue as an opportunity to improve the renter experience overall. Our 2022 Reputation Property Management Report shows that review volume is up 7% compared to 2021, but sentiment is down by 0.2 stars.
Reviews about rent specifically have increased by 3.5% year over year, with sentiment dropping by 0.12 stars. It goes to show that renters are sharing their experiences, and mostly the negative experiences . The data from the Property Management Report report shows that as rent prices go up, residents don’t see the value of their quality of living space improving.
So how can property managers lean into their customer experience (CX) to offset the negative impact of rent prices? Here are just a few suggestions:
- Ask for reviews — Monitor all appropriate sources for renter reviews and respond to as many as possible to show you’re on top of any potential issues or concerns.
- Survey your residents — By directly asking your residents for feedback, you can stay on top of any emerging trends across all your locations and ultimately take action on the data you have uncovered.
- Value the voice of the employee (VoE) — Happy employees equal happy residents. If your employees are content with their work situation, they’ll provide better service to your residents.
- Centralize your CX data — Consolidate your customer feedback data into a single automated platform to collect, house, and report on both public and private data. That way, you’ll have a complete picture of your customer journey.
About the Author
Kerstin Young, CX Strategist, Reputation, responsible for strategic CX consulting to review best practices and provide guidance across various phases of the consumer journey.
