The rapid and strong growth in the conventional apartment market of late likely benefitted purpose-built student housing as the sector approached the Fall 2021 leasing deadlines.
As leasing activity for conventional apartments improved across the nation, prices for those apartments near college campuses rose significantly, making their counterparts in purpose-built student projects more attractive to price-conscious students.
Today, rents for conventional apartments within three miles of a campus – which RealPage calls student competitive housing – average a little more than $1,130 per bed per month across the core 175 universities tracked by RealPage. That’s up from the $1,000 low in December and prices the average student competitive apartment more than 50% above the national norm for student housing rent of $725 as of August.
With the rapid rise in market-rate rents, students looking to live near campus likely found the lower-priced purpose-built product suddenly more appealing. They also likely found very few options available to them in the conventional market, as occupancy in student competitive properties has tightened considerably – to a record high of 97% in August. The pre-lease occupancy rate across purpose-built product, by comparison, hit 92.2% in August.
As student competitive occupancy rates have tightened, available housing units near college campuses dwindled. The estimated vacancy rate multiplied by existing housing stock shows that there are 103,000 fewer available student competitive beds today than one year ago.