Increased Shadow Market Availability Gives Students More Options
Student housing renters have more housing options close to campus these days.
Student competitive supply, which RealPage defines as any conventional apartment unit within three miles of a college campus, finally has enough vacancy to give student renters more options for their living situations. Many operators also refer to this supply as the shadow market.
As of August 2024, about 350,000 student competitive beds sat vacant across the U.S., marking a meaningful increase from extremely low vacancy in 2021 and 2022.
This comes on the heels of record low availability of about 3% of student competitive beds in summer 2021. Students were finally back on campus at that time, after the COVID-19 pandemic, and demand for student housing at that time ran alongside unprecedented apartment demand in the conventional market. That altogether fueled an insatiable demand wave for student competitive assets.
Demand began to normalize throughout the next 12 months, leading to about 92,000 additional unoccupied student competitive beds nearby college campuses by August 2022. But considering when most student leases are signed, there was still exceptionally limited availability of student competitive beds until about May 2022.
In 2023, signs of normalization emerged. Boosted demand across campuses appeared to slow as the class of Fall 2020 entered their senior year of undergrad. Meanwhile, more like 325,000 total student competitive beds were available in August 2023, a 27% increase from the year before.
Competitive vacancy has leveled off, ending the Fall 2024 leasing season with just 25,000 additional vacant beds than the start of the year, translating to about 8% more available beds over last year.
All that availability means student demand could be spread throughout the competitive space, in addition to the purpose-built student space.
For more information on the student housing sector, watch the webcast: Market Intelligence: Fall 2024 Student Housing Update.
