Michael Goldsmith: Our turnover was down 100 basis points in January and blended lease growth increased to 2%. Is that indicative of an upturn in trend? Maybe asked another way, is there any indication that demand has bottomed and how did top of funnel demand and conversion in January compared to December or prior months?
Keith Oden: So the question of kind of where we see demand, I think that the decline that we saw between November and December was far — it was outsized compared to normal history. We normally see a decline in occupancy and rental rates from November to December, at somewhere around the 20 basis points or 30 basis points and this year it was wide of that by 40 basis points or 50 basis points on both metrics. So there’s clearly — there’s something changed in the total amount of people seeking apart — seeking to lease apartments between November and December that was a little bit higher than what we would have normally expected. There’s no doubt about that. I mean we have sort of kind of made the comment internally that it felt like people a lot of our runners went home toward Christmas holidays and a fair number of them stayed at home.
So but look our trends have gotten better in January. Our traffic is sufficient to backfill and to maintain the occupancy and over time increase it a little bit. We did decrease our overall occupancy for the year of 2023 from where it was last year, but last year, we at historically elevated levels and we have modeled 95.7% in occupancy for 2023, which, again, by historical standards is really still quite strong for us.
Ric Campo: One of the things that was — I will just kind of hit it in a really broad way, because and these data points that I am going to give you right now are just really hot off the press over the last week or two. As Keith pointed out, we felt definitely a — more a seasonal situation during the fourth quarter. But it was also, as he said, it’s sort of like people just went away in December. And when you look at the stimulus and post-pandemic demand, right? And think about this, these numbers are pretty amazing. In 2021, the industry absorbed 600,000 net new units in 2021 in multifamily and that’s when we had the massive stimulus, lots of people have money and they moved out. If you look at the average between 2014 and 2023 or 2021, the average, there are about 150,000 people on average that made between 25,000 a year and 75,000 a year.
In 2021, that number grew to 450,000. And so the same thing can be said for the 75,000 to 100,000 cohort, went from 100,000 people to 150,000 people. And then over 75 went from those were fewer, but you went from 150,000 people on average to 2.25%. And what happened was the whole market moved up in terms of people that had money because of the stimulus and because if you think about — even if you lost your job during this pandemic, if you lost your job in 2008, 2009, you have got a fraction of your pay unemployment — maybe 60% of your pay through unemployment insurance. The way that stimulus worked and the way unemployment was tweaked during the pandemic is you have got 110% or 115% of your pay when you lost your job. So you have this massive saving.
