Housing Snapshot: Concessions stay low amid surge of new supply
Offering concessions is one way property owners can attract tenants in a competitive market. Concessions are enticements with economic value for renters, such as periods of free rent, free utilities, or other amenities. Concessions data from RealPage’s Axiometrics, a Dallas-based commercial real estate researcher, shows that in most markets, property owners have not needed to use these methods to keep units occupied.
As seen in the chart below, concessions remained near historically low levels over the last four years and have declined modestly from a year ago. In fact, the value of concessions has remained below -1 percent of annual asking rents for over two years. That’s down from more than -7 percent in 2009 – the equivalent of three to four weeks of annual rent.
For more information, read our December 2017 Multifamily Market Commentary.
Opinions, analyses, estimates, forecasts and other views of Fannie Mae’s Multifamily Economics and Market Research Group (MRG) included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the MRG bases its opinions, analyses, estimates, forecasts and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts and other views published by the MRG represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.