I recently had the opportunity to attend the Pacific Coast Builders Conference, the largest homebuilding trade show representing the West Coast region. In addition to interacting with exhibitors and products, I took part in a few education sessions to discover the latest industry trends that are impacting building product manufacturers and their professional audiences.
In connection with PCBC’s Multifamily Trends Forum, Witten Advisors, an advisory firm based in Dallas, TX which covers 43 of the top apartment markets across the country, unveiled their latest study on the U.S. Economic Outlook and Apartment Markets Overview.
Here are some of the key takeaways:
- There has been an overall slowdown in rental household growth since 2011 but it’s primarily driven by single family rental (SFR) properties. Apartment household growth has remained firm.
- The apartment market is performing as expected in 2017 with occupancy rates stabilizing above 95%. Cost of rent rates, while decelerating year over year, are showing moderate to healthy growth.
- Year over year growth in apartment demand is below growth in supply in 23 of the 43 markets including key metro areas in the South and Northwest, whereas demand growth is outpacing growth in supply in parts of the Midwest, Mid-Atlantic and West Coast.
- While 20-34 year olds represent the largest share of all renters, recent growth in rental demand has stretched across all age groups under 65. As Baby Boomers retire and potentially look to downsize, this trend should continue.
- The overall housing market continues to take steps forwards as there have been a higher combined total of renters and owners compared to mid-2016.
- After hitting a low point in 2016, homeownership rates are up for the third consecutive quarter. However, they remain relatively flat among young adults with only 34.3% of households under 35 owning a home.
- Apartment starts should ease moderately over the next year given a cautious, more expensive capital stack.
What does it all add up to for building product manufacturers that seek to grow their presence in residential and multifamily spaces?
Let’s start with smarter segmentation strategies. With all the available data points out there, it’s paramount for brands to clearly articulate. More importantly, they should differentiate their approach throughout multiple audiences and market segments. Ask yourself, do you treat production builders the same as niche builders? Do you view multifamily as a category of one or are there sub-sectors where your products best fit? And how are you distinguishing your growth opportunities across varied geographic and demographic lines?
Additionally, use available data to influence your message. Again, ask yourself, are your marketing strategies more focused on telling professionals how great your product is, or are they put in context to help address the issues your audience is facing? Does your content connect to industry trends such as labor shortages, energy codes, homeowner relationships and other topics that directly affect a professional’s ability to complete their work?
The ability to uncover actionable insights from data, coupled with the rise in demand generation practices, provides brands a unique opportunity to leverage more meaningful relationships with building product professionals and grow their footprint in key market segments.
Are you focused on reaching professionals in the residential or multifamily space in order to drive growth? Simply Contact us to learn more about successful demand generation strategies.