College Town Renewals Dip in 3rd Quarter

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Resident renewals at lease expiration tend to dip notably in college towns during 3rd quarter. Compiling a concrete definition of a “college town” can prove to be a challenging task, but one feature that appears to be rather distinct among towns that are traditionally thought of as college towns is a lower propensity for resident renewal in general. College students tend to be a fairly transient population, and their lease terms are often influenced by the academic calendar rather than a “traditional” leasing calendar seen in most other major U.S. apartment markets. One tell-tale sign of such a trend in a college town is a sharp dip in resident renewals during the 3rd quarter of each year. That’s probably no coincidence either, as a student’s lease would be more likely to expire at the start of the Fall semester. Compared to the U.S. overall, this group of college town markets (consisting of the largest college towns in the nation among the RealPage Top 150 markets) sees the lowest renewal propensity during 3rd quarter each year, whereas the nation overall tends to see a lower share of renewals during the winter months (traditionally thought of as the “off season” for leasing activity. One other interesting phenomenon of late is the sharp downturn in renewal conversions among these college towns. As of 3rd quarter 2021, just 43% of leases were renewed in college towns, on aggregate. In comparison, 54% of leases were renewed in the U.S. overall.