The real estate industry has always been very dynamic, but recently, it has undergone significant shifts that have impacted renters. As the housing market continues to evolve, renters find themselves navigating a difficult environment influenced by economic conditions, changing demand, and new trends.
Let’s take a closer look at the current state of the real estate industry for renters, including some challenges they face and opportunities that are coming.
rising rental costs.
One of the most pressing issues for renters today is the continuous rise in rental costs. Across urban and suburban areas, rental prices have skyrocketed, making it increasingly difficult for many to afford housing. An analysis of Zillow and StreetEasy’s rental data shows that rent prices across the US are increasing at a faster pace than wages, especially in major cities like New York. This mismatch between rising rents and stagnant wages means a larger portion of people’s income is going towards housing, making affordability more difficult and unrealistic. Several factors contribute to this trend, including:
High Demand & Low Supply: The demand for rental properties has outgrown the supply, particularly in high-demand areas like major cities and hubs. This imbalance is contributing to higher costs, leaving renters with very few affordable options.
Inflation & Economic Pressures: As inflation affects the entire economy, owners are often compelled to raise rents to cover their costs for property maintenance, taxes, and utilities.
Post-Pandemic Market Adjustments: The COVID-19 pandemic led to fluctuations in the rental market, with some areas experiencing temporary rent drops. However, as the market has rebounded, rents have significantly increased.
For renters, these rising costs mean that budgeting for housing requires careful planning and may require exploring alternative living options. We have seen an influx in sharing spaces, tiny living, or relocating to less expensive areas.
the shift toward suburban and rural rentals.
The pandemic has accelerated a trend toward suburban and rural living. With the rise of remote-first work, many renters are no longer tied to urban areas and are seeing more space and affordability in suburban or rural areas. This shift has resulted in:
Increased Demand in Suburban + Urban Areas: Suburban and rural areas have seen a surge in demand for rental properties. This increase is now driving up rents in these areas.
Changing Rental Market Dynamics: Owners in traditionally less competitive markets are finding themselves in a stronger position, able to demand higher rents and offer fewer concessions.
For renters, this trend opens up opportunities to find more spacious and affordable housing, but it also requires adjusting to different lifestyles and potentially longer commutes for in-person work.
the rise of build-to-rent communities.
A huge development in the real estate industry is the rise of build-to-rent (BTR) communities. There are residential developments specifically designed for renting rather than selling. BTR properties offer a wide range of amenities and are often managed by professional property management companies, providing a higher level of service than traditional private rentals.
Some benefits include:
Modern Amenities & Services: BTR communities often come with features like gyms, pools, coworking spaces (perfect for remote work), and community events, perfect for a high-end lifestyle. And, regularly exceeding the offerings of a traditional apartment complex.
Flexibility & Stability: Renters in BTR communities may benefit from long lease terms and more stable rental costs, proving better security and predictability.
However, the premium nature of these properties can also mean higher rents, so renters are forced to weigh the value of amenities against the cost.
As the demand for BTR communities grows, strategic digital campaigns are essential to stand out in the market. In August 2023, we teamed up with a BTR community near Atlanta to help boost leasing and reach their 94% occupancy goal by April 2024. Through dynamic Google and Social Media campaigns, we surpassed expectations. In just six months, they achieved 100% occupancy, over 300,000 impressions, and an impressive 80% average website engagement rate.
Technology continues to revolutionize the rental experience, making it easier for renters to find, lease, and manage their homes. Some of the ways technology is impacting renters include:
Online Rental Platforms: Websites and apps have streamlined the process of searching for and applying to rental properties, giving renters access to more options.
Smart Home Features: Many rental properties are equipped with smart home technology, such as keyless entry, smart thermostats, and security systems, enhancing convenience and safety.
Virtual Tours & Remote Leasing: The pandemic accelerated the acceptance of virtual tours and remote leasing, allowing renters to view and secure properties without needing to be physically present.
These technological advancements offer greater convenience but also require renters to be more tech-savvy and vigilant about online security.
opportunities for renters.
Despite the challenges, there are still many opportunities in today’s market:
Rent-to-Own Programs: Some developers and owners offer rent-to-own options, allowing renters to build equity in their home over time with an option to purchase the property later. This can be a viable path to homeownership for those who are not able to provide a down payment.
Exploring Emerging Markets: Renters willing to explore new up-and-coming neighborhoods or smaller cities can often find more affordable rents and a higher quality of life, with the added benefit of potentially seeing property values rise if they choose to purchase in the future.
Specials & Concessions: In some markets, especially where there is a surplus of rentals, owners and property managers may offer competitive pricing, specials, or additional concessions, such as discounts on rent or waived application fees.
The current state of the real estate industry presents both challenges and opportunities for renters. Rising rental costs, shifting market dynamics, and the impact of technology are all forming a new landscape. By staying informed and being strategic, renters can navigate these changes and find housing that meets their needs and budget. As the market continues to evolve, renters who are adaptable and proactive will be best positioned to thrive in this complex industry.
about the author.
Amanda is the Digital Junior Client Success Manager at Threshold. In her role, she is responsible for relationship management, client advocacy, renewals and upsells, monitoring metrics, strategy development, and documentation and reporting. When she’s not busy managing her clients, you can find her picking out new plants, watching Cowboys football, running her small business, or spending time with her fur baby, Daisy Marie.
First Savings Bank is a leading financial institution offering personal accounts, business accounts, and top-notch solutions for people who care about their money. While their marketing machine was getting the job done, they wanted to do more than just “okay.” That’s where we came in.
They hired Threshold with the goal of opening 463 new accounts and achieving a 20% lift in customer acquisition. Starting in May 2023, we launched targeted campaigns across Google Search, Facebook, Instagram, and programmatic digital display platforms for First Savings Bank. The campaigns leveraged the unique selling points of First Savings Bank’s products, including Kasasa Cash Back, Kasasa Cash, and Kasasa Eats accounts.
The campaign yielded impressive digital marketing and account growth results that transcended expectations.
the problem to solve.
Their previous marketing campaign was good but not good enough. First Savings Bank struggled to differentiate itself in a market saturated with competition. Our goal was to use punchy, high-performance ads that spoke directly to their target audience. We took geographic location, buying patterns, and the customer lifecycle into account when engineering their ad strategy.
the dream.
To build an unstoppable marketing funnel that would accelerate growth well ahead of schedule. We aimed to hit their goal of 463 accounts and a 20% increase in customer acquisition, then go a little further.
the strategy.
Our goal was to hone in on First Saving Bank’s unique selling propositions, like Kasasa Cash, and effectively communicate them to the target audience. We opted for an omni-channel marketing strategy to cast a wider net and bring home more leads.
phase one.
We focused on emphasizing the brand’s innovative products like Kasasa Cash Back, Kasasa Cash, and Kasasa Eats to differentiate them in the market. We tailored the messaging to align with the target customer and “speak their language.” Phase one was consumed with research, research, and more research before launching the campaign.
phase two.
Next, we implemented our research across multiple channels, including paid search, Instagram, and Facebook. We used our signature ad strategy to produce results that exceeded the campaign’s goals.
the results.
For First Savings Bank, we did what we do best — create results that go above and against the grain. Here’s how it went down…
The campaign generated significant digital engagement, with high click-through rates, particularly on paid search. This indicates effective targeting and compelling ad content that resonated with the target audience.
First Savings Bank surpassed its account growth goals well ahead of schedule, achieving 638 new accounts by April 1st. The overall lift in performance exceeded projections, demonstrating the effectiveness of the marketing efforts in driving customer interest and conversion.
to wrap things up.
Threshold’s strategic digital marketing campaign effectively drove new account growth and exceeded performance goals, showcasing the bank’s appeal and attracting customers seeking modern banking solutions. By leveraging unique product features and maintaining a focus on customer satisfaction, Threshold helped First Savings Bank be positioned for continued success in the competitive financial market.
Today, we delve into the dynamic world of marketing for financial institutions. With a sharp eye on the trends shaping the industry, we explore how credit unions and banks are navigating the challenges posed by interest rate volatility, regulatory changes, technological innovation, macroeconomic shifts, and cybersecurity risks.
From proactive strategies to maintain competitiveness amidst changing consumer behaviors to practical solutions for optimizing online presence and customer experience, discover how Threshold can help financial institutions thrive in the ever-evolving landscape of 2024.
navigating interest rates
Interest rate volatility continues to be a pressing concern for credit unions and banks alike. With portfolios sensitive to rate fluctuations, retaining deposits amidst inflation worries is a challenge. In 2024, consumers are reallocating assets, emphasizing the need for proactive strategies to maintain competitiveness.
Have we piqued your interest yet?
staying ahead of the competition
Changing interest rate environments drive banks to offer more competitive products and services. This shift may draw customers away from credit unions, highlighting the importance of innovation and differentiation in attracting and retaining clientele. By keeping an ear to the street and maintaining a keen awareness of the needs of the customer, Threshold can help institutions stand out and be the change consumers want to see in the world of banking.
adapting to regulatory changes
The financial landscape evolves alongside regulatory frameworks. Remaining current and adaptable is crucial for credit unions to operate profitably amidst changing regulations, ensuring compliance while driving growth. Regulation maintains the nation.
embracing technological innovation
The financial industry is witnessing a surge in disruptive technologies. From AI asset allocation to FedNow payment rails, embracing innovation is essential for credit unions to stay competitive and meet evolving consumer expectations. Let Threshold help metamorphosize your marketing programs to meet the needs of tomorrow along with today.
navigating macroeconomic challenges
Economic downturns amplify risk for credit unions, necessitating proactive risk management strategies. Adapting to reduced loan demand and increased defaults is crucial for maintaining financial stability in turbulent economic climates. Flexibility is key!
prioritizing cybersecurity
Major data breaches have eroded consumer trust in the finance sector. Credit unions, with typically lower IT budgets, face heightened cybersecurity risks. Investing in robust cybersecurity measures is paramount to safeguarding sensitive data and maintaining consumer confidence. (Financial) health is wealth.
strategies to win
online account opening.
Simplify the account opening process with digital options, catering to the convenience-oriented preferences of modern consumers.
A recent Threshold case study found that the presence of an online account opening option resulted in a 34% greater conversion rate and a $500 savings in cost per acquisition relative to banks and credit unions who do not have this functionality.
conversion optimized website.
Enhance website functionality with intuitive contact forms and clickable phone numbers, facilitating seamless communication with prospective clients. Keep it easy.
one-click phone dialing.
Prioritize human connection with one-click phone dialing options, offering real-time support to customers seeking assistance. We’re all in this together.
streamlined application process.
Minimize friction in the application process, optimizing conversion rates by prioritizing intuitiveness and convenience. The more convenient the application process, the more likely customers are to cross the finish line. Simple.
before you go.
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about the author.
Rob is a Digital Client Success Manager at Threshold, helping financial institutions achieve their marketing vision through strategic partnership and creative inputs from inception to the finish line.
When not at work, you can find him enjoying the outdoors, exploring new cities, checking out the latest in Austin’s burgeoning food scene, or soaking in some local music or stand up.
Rob Sutherland