MyNewPlace Blog

Last week on Multifamily Insiders, Michael Cunningham of Real Page wrote an article, Imaginary Roommates Don't Pay Rent, which examined the much discussed rental phenomenon of doubling up. Mr. Cunningham contended that although anecdotal information (glorified on the internet) seemed to suggest that a very significant number of renters are moving in together to save on rent and that this would be a significant trend for the rental market, the numbers just don't support that kind of trend.

Our data, which is how renters search, not occupancy rates, shows that there is in fact a significant uptick in demand for apartments with more bedrooms and a corresponding drop in demand for 1 bedroom apartments. It is important to remember that these two accounts do not conflict, as MPF Research reports occupancy data, whereas we are relying solely on renter search behavior.

Since millions of renters come to our site each month, we wanted to share some patterns that we have seen over the past year and a half regarding not occupancy rates according to MPF research (as is cited in the aforementioned article), but rather, how renters are searching. Renters are overwhelmingly using the internet as a primary resource for their apartment search; therefore, our search data is a good indicator of what renters are seeking.

The chart below documents all searches conducted on MyNewPlace and clearly shows that searches for 3 bedrooms gained at the expense of 1 bedroom searches:

The biggest shift occurred in Q1 2009, where searches for 3 bedroom apartments grew from a 22 percent share to a 31 percent share, 1 bedroom apartments dropped from a 32 percent share to a 25 percent share, and 2 bedroom apartment searches fell slightly from 46 percent to 44 percent.

We must assume that this trend is due to renters trying to find 3 bedroom apartments to save money. Initially, the patterns in the chart seemed intuitive. If you can't afford a 1 bedroom apartment, you probably cannot save that much money by moving into a 2 bedroom apartment; it is when you get into apartments with 3 or more bedrooms where the price per bedroom really begins to drop and renters can reduce their apartment budgets significantly.

Who are these renters, then, that are searching, but seemingly not moving into 3 bedroom apartments? Are they families who in the end opt for a single family home rental? Are they recent college students, who are researching places where they and their friend can afford to move into from their parent's houses?

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