The rising relocation trend we saw throughout the pandemic isn’t over yet. According to renters, 2022 will be another year full of big moves.
At the end of 2021, 82% of U.S. renters said they had plans to move in 2022 — either to buy or move to a new rental — according to Zumper.
When asked what type of housing they plan on moving to in 2022:
- 42% plan to buy a home;
- 36% plan to rent an apartment; and
- 22% plan to rent a single family residence (SFR).
The survey asked homebuyers and renters how often they have moved since the start of the pandemic, and:
- 46% have not moved;
- 28% have moved once;
- 18% have moved twice; and
- 8% have moved three or more times.
Turnover, the share of renters or homeowners who move each year, is the lifeblood of the real estate industry. Without homeowner and renter turnover, there is no movement in the market. When turnover stagnates, no one gets paid.
The large share of renters seeking to rent and buy in 2022 is promising for turnover — but the optimism in the survey is hugely misleading. If 82% of renters are to move like they plan to in 2022, this is a significant increase from the 74% of renters who have moved at least once within the past two years. Further, 42% of those who plan to move are also planning to buy a home. With today’s rising interest rates and stiff competition for a limited inventory of homes, it’s extremely unlikely.
Related article:
Lack of housing movement is the silent supply killer
While real estate professionals can’t count on the high level of turnover promised by the renters surveyed, one thing the survey does show is this: demand to buy and rent remains high. But this high level of demand remains unmet across the U.S., and especially here in California.
California’s minimal for-sale inventory and low rental vacancy rate is debilitating for renters. When sellers feel confident enough to list their homes, inventory rises and so does turnover. Likewise, home price increases slow, becoming more stable and accessible for homebuyers. A healthy vacancy rate is also stabilizing for the rental market, allowing market rents to rise gradually in line with incomes.
However, when homeowner and renter turnover remains reduced as in 2021-2022, the real estate market is bungled for renters, buyers and real estate professionals.
The inventory shortage will not magically change overnight. Genuine effort to solve the inventory crisis needs to occur.
California’s legislature is continuously trying to find solutions for the housing shortage, including:
- loosening strict zoning regulations;
- requiring amendments of local governments’ housing plans to include more low- and moderate-income units;
- encouraging accessory dwelling unit (ADU)construction; and
- incentivizing transit-oriented developments.
Turnover depends on the ability for homebuyers and renters to move. Creating more supply can only assist the ability for homebuyers and renters to move and make more room on the housing market. Without this kind of movement, supply will stall further as sellers and renters stay put for fear of the inability to find replacement housing.
Stay up to date with potential and new legislation impacting real estate practice in California by checking out firsttuesday’s Legislative Gossip page.
