Three Economic and Demographic Factors that Drive Turnover
Digested from RealPage
New supply is only one big market factor in what determines whether residents stay at home or decide to look for a new apartment.
When a resident decides to leave your community, there are usually three factors at play, writes Brandon Crowell for RealPage.
The first factor, employment growth, is a strong predictor of resident retention, according to Crowell. In metros with strong employment growth, turnover is higher as people who want to live near their place of work congregate where jobs are created. Conversely, turnover is lower in markets with fewer employment opportunities.
Median age also plays a large role in retention. As residents age, they are less likely to move, according to Crowell.
“The transient life stage of younger people make them less likely to have children and more likely to switch jobs,” he writes. “Renter mobility is clearly evident when looking at the metros’ median age. Cities with the highest retention also tended to have an older median age than those where residents were likely to move out.”
For apartment owners and managers in Denver and Charlotte, the last retention factor probably is not a surprise. New supply tends to lead to more turnover, according to Crowell.
“As new apartments open up, renters have more choices of places to live,” Crowell writes. “This creates a more competitive leasing environment. Many of the high-turnover markets have also been development leaders since the current cycle began in 2010.”