This month, we’ll talk to mortgage leaders about where the market is headed and how products are evolving digitally to suit buyers’ needs now. We’ll also explore emerging alternative financing options that are changing the game for buyers and sellers. Join us for Mortgage and Alternative Financing Month.
This handbook was last updated on May 30, 2023.
In a May 25 report on pending home sales, National Association of Realtors’ Chief Economist Laurence Yun said that inventory will continue to anchor the market in place.
“Not all buying interests are being completed due to limited inventory,” Yun said in a statement. “Affordability challenges certainly remain and continue to hold back contract signings, but a sizeable increase in housing inventory will be critical to get more Americans moving.”
This means more Americans will continue to rent until the market thaws enough to let new buyers and homesellers break through. However, not everyone wants to own or house, or at least, isn’t concerned with the opaque status of the market. Customers of apartment subscription business Landing, for example, appreciate the ability to move as desired, to try on new cities and forge ahead as fully entrenched members of America’s new remote work generation.
The company allows users to choose a city and a partner apartment community, fully furnished, for as long as they want to stick around, beyond the minimum of 30 days. There’s also a flat-fee program for “living on standby,” allowing customers to crash at a place until another Landing member wants it for a longer term. Unplug, pack up and move on.
Landing appeals to landlords because it handles all of the tenant background checks and other renter integrity verification. The average stay of a Landing tenant is six months, there’s less wear and tear on units because the furniture stays in place, almost zero per-unit marketing fees and Landing takes care of all the administrative tasks and tenant communications.
Agents working with aspiring buyers can use Landing as a resource to “place” them while waiting out the market, or for the right opportunity, as short-term leases with traditional landlords are rare. This means when the right home hits the market, the buyer can move faster.
Landing is definitely a unique take on renting, and one that no doubt has its place in the modern workplace. As commercial properties remain vacant and work-from-home models appear to be sticking, options like Landing will likely continue to thrive, and what follows should help you understand why.
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Nomadland
Remote work has exploded, and it doesn’t look to be slowing down much, even as the country starts to envision a return to “normalcy.” Hybrid models are growing, too, offering employers a middle ground for those determined to maximize home office deductions.
The Los Angeles Times reported in late 2022 that companies offering hybrid models experience less turnover, citing research from Stanford University, the University of Chicago and the Instituto Tecnológico Autónomo de México published in the National Bureau of Economic Research. The study found that “hybrid [work] was highly valued by employees on average, reducing attrition by 33 percent and improving job-satisfaction measures.”
Inman reported in May on comments made by Airbnb CEO Brian Chesky, who noted that many of the CEOs calling workers back to the office will likely be spending their time somewhere else.
In an interview on The Verge’s Decoder podcast that aired May 9, referring to New York City businesses, Chesky called their approach, “old world.”
“I guarantee you that many of these CEOs who are calling people back to the office in New York City are going away to the Hamptons for the summer or going to Europe in August. I still think that’s happening. So you still have incremental flexibility.”
Airbnb, an influential company in the tech space, allows remote work. Chesky claims that the company “had the most productive two-year period in our company’s history — all while working remotely,” and that it received over 800,000 new job applications after making the announcement in 2022.
Yet, for millennials, a crucial homebuyer demographic, there’s more to the relocation trend than the thrill of new places. It’s about affordability. Many of them don’t believe they will ever be able to own a home. Renting is their long-term reality.
Home prices have slid, but still remain way out of reach for many first-time buyers.
The recent fall in home prices since the summer peak is mostly due to what’s happening in the upper and middle price tiers, Inman reported. Online search company Zillow also found in a recent analysis that homes in the bottom third of home prices were still worth 8 percent more than at this time last year.
“Buyers shopping for the least-expensive homes this spring aren’t noticing much difference from the pandemic-era market heat,” Zillow Chief Economist Skylar Olsen said in the report. “Competition is fierce, but there aren’t many homes for sale, so buyers should be patient but prepared to move quickly and anticipate a bidding war once they find a home they love.”
There is some positive news for wannabe owners, however, as some research shows that remote work trends may create affordability windows in some markets.
A new analysis released by the public policy organization the Economic Innovation Group argues that remote work may lead to greater housing affordability in the long run.
The analysis posits that the areas remote workers are relocating to — chiefly, the Sun Belt region and suburban areas outside major American cities — are some of the areas best suited to take on new housing construction, rather than big cities.
The study acknowledges that for this to fully take shape, significantly more housing supply will need to come to market, which has been thrown into question in the future by the steep rise of inflation and interest rates.
As Zillow’s Olsen said, should pockets of affordability open, buyers need to move fast, and that requires flexibility.
Enter Landing, which in August of 2022, secured a $125 million round of series C funding led by Delta-v Capital. The funding was to be put toward expanding its network of apartments. It appears to be money well spent.
Additional resources
- Not just a coastal thing: 7 inland cities most altered by remote work
- US migration drops even as remote work fuels long-distance moves
- Remote work named No. 1 issue affecting real estate
- Remote work’s impact on real estate will linger — possibly forever
- Does remote work spell doom for Florida’s housing market? The Real Word
Subscription living
Landing’s model enables people a flexible living arrangement through a 375-city (and growing) network of ready-to-go apartments.
Customers can choose from furnished residences in multiple neighborhoods with an array of amenities. They can stay for as little as 30 days or for as long as they like. Renters have access to all of a community’s features and can bring pets.
Obviously, everything can be done using Landing’s mobile app for both iPhone and Android.
Landing units come with custom-made furniture, bedding, a SmartTV, Wi-Fi, toiletries, kitchen supplies and towels. It’s similar to a high-end hotel stay, and it even includes cleaning services upon request or at approved frequencies.
Landing also handles all fees associated with a lease, including utility costs.
Per its business model, landlords set a minimum monthly rate per unit upon account setup, and Landing dynamically prices it from there, taking into account market trends and seasonality. The company charges an 8 percent fee upon reservation.
Members don’t pay security deposits because the furniture belongs to Landing, and it performs a background check on members. That’s not a bad trade-off.
Legally speaking, members are subleasing from Landing and signing a lease with the landlord, which in most cases is a national, institutional landlord owning thousands of newer, well-appointed communities.
Pet fees are included in a user’s fees, and up to two dogs and two cats are allowed. The company does discriminate against a number of dog breeds, according to its FAQ section, mainly large breed dogs.
When a member contacts Landing with interest in a city, Landing then turns to the property’s management to begin the leasing process. It acts as a broker in some respects and as a concierge that assists members with relocation questions, fee concerns and other types of service while in a property.
Landing Hosts are paid staff in each market responsible for helping members get settled. They can field questions about moving in, oversee cleaning and basically, function as an ad-hoc property management representative. Hosts have an array of roles, and some specialize in cleaning while others may handle staging a unit or helping market it for the company.
Landing shouldn’t be confused with “short-term rentals” like Airbnb and VRBO. It’s more “mid-term” renting, with members able to relocate to a new city with a 30-day notice to other furnished units.
The furniture and decor are all designed specifically in-house by Landing, which then partners with manufacturers to produce it. Although not every apartment is the same, it will be designed with similar themes and is meant for the individual to feel at home each time they move into a new city.
Landing’s founder is not new to building businesses. He sold a rapid delivery business, Shipt, to Target for all kinds of money ($550 million) and eventually used $15 million of that to launch Landing.
Additional resources
- It now costs $888 more to buy a home than to rent one: Report
- Rent prices see early signs of cooling
- With rent high and sales slow, more owners are becoming landlords
- Place tenants and find future buyers with RentBase, a CRM for rental agents
- Rentals are a bright spot amid a widespread slowdown. Can it last?
Living on standby
Landing’s newest flexible living iteration is called Standby, and it’s rather self-explanatory. For the very flexible remote worker, this program charges users $1,495 per month for access to every home in Landing’s network outside of New York and California, but likely for a much shorter amount of time.
Tenants can move into a vacant unit between longer occupancy periods. Should a 30-day or more tenant want that unit, the Standby user is “bumped,” or required to move within three days. Landing takes care of the cleaning fee and the mobile app will direct the tenant to what’s available next. Landing will take care of the cleaning fee when bumped, but if the tenant has had enough of a city and wants out, they’ll pay the $150 fee.
Unlike the standard, $199 membership, Standby users can’t bring pets along and can’t stay as long as they want.
What might stand out to users of this membership level is that they’re not paying any additional rent on top of the $1,495. Obviously, having to move on short notice and learning to be comfortable with so few belongings isn’t for everyone. It can be thought of as a more civilized version of “van life,” the growing trend of living and working remotely out of highly customized cargo vans, popular in the western United States, especially.
Additional resources
- Latchel locks onto $16.7M round to bolster single-family rental solution
- Property management software company DoorLoop unlocks $20M
- Single-family rental investment is booming. These 5 apps are here for it
- Baselane makes property accounting mobile for modern landlords: Tech Review
- Demand for apartments turns negative for first time since 2009
Trying on cities
The pandemic’s impact on how people value housing will be felt for a long time. Whereas some saw it as a reminder that what matters is family and being together in one place, others took it as a sign to see what else is out there — to seek places to enjoy. The latter is what likely explains Landing’s explosive growth starting three years ago, in the back half of 2020.
Real estate has always been linked directly to macroeconomic trends. Without delivering into what could be an entire semester course on the subject, this is why real estate agents tend to be in sync with what’s happening in Washington and Wall Street.
It’s also why so many agents work to earn referrals from local chambers of commerce and organizations involved in their market’s economic development. They want to know who and why people are moving to their city.
Landing’s customers want to know this, too. What can I do in Birmingham? I’m a foodie. What are the restaurant options in Denver? Why is Greenville, South Carolina, such a trendy city these days?
Landing’s model allows future homeowners to “try on” cities, a choice few Americans had before such a company emerged. People relocate for jobs every day in America, but how many of them have spent ample time in said city before packing? It’s not always an easy decision for a family, and it’s one that real estate agents are often challenged with helping them handle.
A colleague relocating soon from New York to Texas has not been able to thoroughly vet where he’ll be living with his soon-to-be expanded family, largely because of COVID-19 restrictions. “Yeah, if it weren’t COVID, I would for sure have taken the opportunity,” he said. “Finding the right neighborhood is really important to me, so I’m for sure worried about picking an area I don’t like and getting stuck there a year.”
Landing members have a unique chance to explore and vet cities should permanent living situations ever arise, and as Landing’s partner cities expand, so does the opportunity for people to join to find a new home.
Inman Coast to Coast member Alison Wisnom is an associate broker at Coldwell Banker Realty’s Annapolis Plaza Office and a Realtor at Coldwell Banker Realty Hawaii. She works heavily with military families and plays multiple roles on behalf of her relocating clients.
“My role has been more like a host to a new city and a different lifestyle,” she said. “I’ve helped clients get temporary housing so they could look at homes in person, have sold several site unseen, tours by video long before COVID-19. I’ve helped introduce them to spouse job opportunities, sports teams for their kids, people who shared their hobbies, and playmates so their kids would know someone on the first day of school.”
Real estate agents can leverage Landing as a temporary living recommendation for clients relocating to their city. Landing can also help those buyers wanting to relocate to heavily competitive seller’s markets. Spending time in their desired market can help buyers fully grasp it if they have to make an offer sight unseen. The more time buyers get to know a city, the more confident they’ll feel under the pressure of a multiple-offer scenario as well.
Offering to cover their initial annual membership or coordinating with the local Landing host could be considered nice customer service touches. Partnering with Landing to display marketing collateral in certain unfurnished, longer-term units might be a worthwhile effort, too.
However, given Landing’s commitment to not committing to long-term living, they may not be overly responsive. It’s worth a shot, though.
With its list of 375 markets and no signs of slowing, there’s plenty of reason to learn more about Landing’s model.
Additional Resources
- 4.3M apartments needed in US by 2035 to meet demand, study says
- Apartment sales plunge 74%, fastest drop since Great Recession
- One bright spot for rentals? Student housing, at least for now
- Rent peaked where it matters most. Here’s what happens next
- Minimize vacancies and maximize revenue: 5 tips to boost your rental
Capturing renters
The rental market has long been a primary target for residential sales agents. It makes sense. Traditionally, renting comes before owning, and most renters aspire to become homeowners.
The current seller’s market has become more challenging for today’s renters, but these conditions aren’t permanent. They never are. Thus, agents should not give up on their efforts to woo the future business of Landing members.
A time-honored tactic for getting in front of renters is education. Free seminars, white papers and outreach efforts about what it takes to buy a home can go a long way toward ingratiating agents with prospective buyers. Try to avoid preaching about the “benefits of homeownership.” It’s a tired approach, and the topic isn’t lost on renters. In fact, it comes across as condescending.
The majority of renters are aware that owning has many long-term financial and social benefits; the issue is almost always rooted in personal finances and of course, the state of the market. “Renters have lots of things they dislike about being tenants as opposed to homeowners,” wrote columnist Lew Sichelman. “They complain about rising costs and that they are throwing their money away and not building equity. They also gripe that the place they are renting doesn’t feel like a true home, and they feel they are paying their landlord’s mortgage.”
Agents may see more success when they approach renter leads as “certain buyers” who simply haven’t found a home they like. Ask them about preferred neighborhoods and home types, and what kind of timeline they’re considering. The more you can relate today’s renters’ condition, the more apt you are to find them in your pipeline. It all comes back to relationships.
“Renters become re-renters, renters become buyers, buyers become sellers, sellers become buyers, and the cycle continues,” wrote Inman contributor Gina Castrorao.
“It is necessary to understand your business as a combination of ‘little picture’ and ‘big picture’ thinking,” she said. “Your ‘little picture’ is the idea of which clients you can help now to fill your pockets, but these clients will eventually add to the pool of your ‘big picture’ clients after you’ve formed a relationship with them.”
Castrorao suggested staying in touch with renters regularly during their lease cycles, using each term as a milestone for reaching out. “This relationship should continue to grow throughout your interactions together by treating them as a person.”
Landing members are still renters — they still want a nice place to be in a city they enjoy. They may be gone in a few months, as is their nature, but it should be in your nature to give them a reason to contact you should they decide to come back.
Landing’s rapid rise in the rental market may show that many of its members aren’t quite ready to settle down. However, the company can’t survive unless it churns its customer base, and like most renters, those who leave will be seeking more permanent foundations on which to build a home. Be there for them.
Additional resources
- RentSpree PRO to ‘exponentially increase agent efficiency’
- RentPath rental listings go live on Redfin’s real estate portal
- Work with first-time buyers? Turn them on to Gravy, a down payment savings app
- Stake secures $12M in Series A funding to incentivize renters
- What agents need to know as the complex mortgage fee hike kicks in
Have a technology product you would like to discuss? Email Craig Rowe
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.
