Why Casting a Wide Data Net Isn’t Always the Best Approach

Radix

Radix

beach clouds dawn 2132213

Share This Post

When it comes to understanding your apartment community’s performance, it certainly doesn’t hurt to look at as much market data as possible.

 

Monthly and quarterly market reports compiled by research and brokerage firms about your metro area are worth reviewing, but they also have limitations. By the time they arrive on your desk or in your inbox, the data is at least 30 days old. Sometimes the data contradict each other and its projections.

 

Also, these surveys are usually conducted at the market level and then a regression analysis is performed to determine submarket data. This means the survey reports don’t offer true insight into your surrounding submarket, let alone your property’s comps.

 

In the end, the information you really want to dig into and spend the most time with comes from your comps. It doesn’t matter if Manhattan rents were rising a month ago if your community is in Chelsea and rents there are flat today.

 

Getting Vital Data the Right Way:
The problem facing a lot of operators is they don’t have an efficient process for obtaining the kind of data that will benefit them the most.

 

Too many property managers rely on the traditional market survey approach. Busy onsite associates spend hours calling comps to collect data about asking rents, occupancy rate, concessions, etc. When, and if they’re finally able to collect this information, they enter it into Excel spreadsheets. And we all know this presents a whole host of problems and hampers meaningful data analysis.

 

The Value of Submarket and Competitive Data

 

Put simply, real-time submarket data eats monthly market data for breakfast. It optimizes leasing and revenue performance when used in conjunction with revenue management. If your community is located in the booming LoHi area of Denver, you can’t evaluate your property’s pricing based on month-old information about the average rent in metro Denver.

 

Only when operators are up to date about what exactly is happening among their competitive set and in the surrounding submarket can they make the proactive pricing decisions that best position their communities to maintain occupancy rates and drive revenues.

 

To be sure, I’m not discouraging operators from taking note of monthly and quarterly metro reports produced by third-party organizations. It is important to be cognizant of the broader market and to take in the insight and analysis regarding trends in your metro area.

 

But when all is said and done, the most valuable data is the real-time information that you gather from your competitors in your immediate area. It is worth remembering the story of the statistician who drowned crossing a river that was, on average, 3 feet deep.

 

Request a demo to learn more about Radix and how you can leverage real-time market data.

About the author

More To Explore

RAOT Blog Thumbnail Week of November th
Research

Rent and Operating Trends – Week of November 26th 2023

It was a fairly quiet week in the U.S. economy as the Thanksgiving holiday limited data releases last week. Existing trends continued from the prior week as the 10-year treasury continued to drift lower. The yield on the 10-year is now 4.42%, nearly 60 basis points below its recent peak in mid-October.

Chart of the Week Blog November th
Research

Chart of The Week – November 27th 2023

This week we examine the top and bottom performing markets on a net effective rent basis. We have talked a lot about the markets that are both outperforming and underperforming in the previous charts of the week and rent and operating trends report, yet a key distinction that continues to hold true is the severity of the declines in the worst performing markets compared to the modest gains in the best performing markets.