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Looks like Puget Sound market is running 93% occupancy, with 392,000 total apartment units in the market, thats 27,000 vacant units today. Very healthy market b

Looks like Puget Sound market is running 93% occupancy, with 392,000 total apartment units in the market, thats 27,000 vacant units today. Very healthy market but not a crisis. https://simonandersonteam.com/wp-content/uploads/2024/11/2024-Q4-Puget-Sound-Market-Study_Simon-Anderson-Team.pdf https://simonandersonteam.com/wp-content/uploads/2024/11/202...

nothercastle 2y ago
There is a finite limit to occupancy because turn around between tenants has to happen. 93% is probably the equivalent of completely full.
- ethagknight 2y ago
  It’s not, 93% indicates a healthy market that is priced right between renters and landlords. My core objection is to the article stating “everyone knows there’s an affordability crisis” and I am saying there is not a crisis, its a manufactured talking point. For larger professionally (~50+ unit) managed facilities, which is what those reports track and is also what i do for a living, we can turn over very quickly and push much tighter, 98% when possible. 93% occupancy on a typical 200 unit property is 14 units vacant for an entire month, which is unacceptable if there is pent up demand.
  - nothercastle 2y ago
    What’s the optimal point for pricing? Is it better to fill to 98 and charge less or fill to 93 and charge more? We had some finds that lived in some odd the downtown units and their occupancy rate was quite low 70-80% because they were charging way above what people were willing to pay but they never adjusted. There are other factors at play that might be affecting average fill rate. Different plays seem to optimize for different rates.
    - ethagknight 2y ago
      Endless factors come together with different strategies down to each ownership, management, manager, weaknesses in the property like insufficient parking or a compromised floor plan that won’t lease at mkt rate, or broader market issues like weak/strong school districts or job growth, or seasonal factors like university schedule. Societal preference like roommates/no roommates (either marriage or simply splitting the rent bill) can heavily impact demand. For overall market, i.e. happy compromise between landlord and renter, 93 is close to optimal. Landlords really don’t want to go below 90 and typically will start to drop rents to maintain occupancy. If the market pushes past 96, developers can deliver new units pretty quickly. Forecasting- no one can predict the future but everyone thinks they can, so lots of crazy ideas there. There’s also a function of what are people willing/expecting to pay. So if people generally are unwilling to pay above $1700/mo, maybe Landlord just stuffs the property to 99% at the local maximum rent. We have found that to be a working strategy, rather than squeezing every last nickel out of renters, just find the comfortable breakpoint and fill up the building. There’s all these technical details, but then behind each signed lease is a person making a complex personal and emotional decision that changes their lives for the next 12 months minimum. Fun!

nothercastle 2y ago

There is a finite limit to occupancy because turn around between tenants has to happen. 93% is probably the equivalent of completely full.

ethagknight 2y ago
It’s not, 93% indicates a healthy market that is priced right between renters and landlords. My core objection is to the article stating “everyone knows there’s an affordability crisis” and I am saying there is not a crisis, its a manufactured talking point. For larger professionally (~50+ unit) managed facilities, which is what those reports track and is also what i do for a living, we can turn over very quickly and push much tighter, 98% when possible. 93% occupancy on a typical 200 unit property is 14 units vacant for an entire month, which is unacceptable if there is pent up demand.
- nothercastle 2y ago
  What’s the optimal point for pricing? Is it better to fill to 98 and charge less or fill to 93 and charge more? We had some finds that lived in some odd the downtown units and their occupancy rate was quite low 70-80% because they were charging way above what people were willing to pay but they never adjusted. There are other factors at play that might be affecting average fill rate. Different plays seem to optimize for different rates.
  - ethagknight 2y ago
    Endless factors come together with different strategies down to each ownership, management, manager, weaknesses in the property like insufficient parking or a compromised floor plan that won’t lease at mkt rate, or broader market issues like weak/strong school districts or job growth, or seasonal factors like university schedule. Societal preference like roommates/no roommates (either marriage or simply splitting the rent bill) can heavily impact demand. For overall market, i.e. happy compromise between landlord and renter, 93 is close to optimal. Landlords really don’t want to go below 90 and typically will start to drop rents to maintain occupancy. If the market pushes past 96, developers can deliver new units pretty quickly. Forecasting- no one can predict the future but everyone thinks they can, so lots of crazy ideas there. There’s also a function of what are people willing/expecting to pay. So if people generally are unwilling to pay above $1700/mo, maybe Landlord just stuffs the property to 99% at the local maximum rent. We have found that to be a working strategy, rather than squeezing every last nickel out of renters, just find the comfortable breakpoint and fill up the building. There’s all these technical details, but then behind each signed lease is a person making a complex personal and emotional decision that changes their lives for the next 12 months minimum. Fun!