Market Trends of US Property Management Industry
Demand from the Residential Sector is Supporting the Market
House prices continued to increase in most states despite economic uncertainty, inflation, and rising interest rates. The strongest home appreciation was in the state of Arizona, as well as in Maine, Connecticut, and New Hampshire. In Q2 of 2023, prices decreased in eight states and in the District of Columbia, including California, Washington, and Colorado.
In California, the median home value was significantly above the average sales price for both new and existing homes. California is one of the most sought-after housing markets in the United States.
Property management software company RealPage predicts that the number of apartment units completed in 2024 will be 671,953, which is the highest number since 1974.
The apartment supply in the United States exploded in 2023, reaching its highest level since 1987, with over 439,000 new units being built. This increase in supply has provided renters with more options and significantly slowed rent growth, resulting in outright apartment rent decreases in many markets.
As the demand in the residential segment increased, there was also a simultaneous demand for property management. Managing all these tasks comes with a lot of paperwork. That’s the reason property managers are using software to manage all these tasks.
Demand for Smart Homes is Driving the Market
Implementing IoT technology and smart devices is expected to witness an increase in penetration in various aspects of the real estate business. The need for IoT is continuously increasing in the real estate business in order to improve customer serviceability.
Software providers have begun to integrate technology with software to improve communication between the property and its administrators, owners, investors, and others. For example, Capstone Partners, a Texas-based developer, teamed with IOTAS, an IoT solution provider, to create a linked smart home environment for tenants. As a result, the increasing penetration of smart homes is likely to drive property management software solutions.
The massive amount of data created by all linked devices, platforms, and appliances may be used to improve software functions. Furthermore, with data analysis, the adoption of IoT is projected to assist property owners in recognizing connected device performance and taking appropriate action to deliver better services to renters. According to Johnson Controls' building efficiency panel poll, 70% of respondents feel that introducing IoT to anticipate and diagnose trends will fuel demand for the software.
