Each week our "downturn" roundtable enables us to discuss current pricing and revenue management (PRM) issues with some of the most experienced PRM practitioners in the industry. Each week we summarize the most recent insights. 

Below we summarize the audience responses to prompts (all answers are anonymous) on our most recent call (May 20) along with some information we re-shared from RealPage. If you have different insights or questions that you would like us to address in the coming weeks, please leave them in the comments or contact us through the site.

This week we opened up with a discussion about some key metrics we saw in a RealPage blog:

• Despite the pandemic, occupancy April remained well above the prior ten-year average and slightly above April 2019. Strong February and March occupancies helped with that as April 2020 occupancy was below March 2020. Normally April occupancy is higher than March
• Through mid-April, canceled move-outs were roughly double the historical norm. We look forward to future reports to see how long this tailwind sustains
• Retention rates in April were at least 400bps higher than normal (at 57.9%)
• All the above was at the expense of rent growth. Effective asking rents went from >2.5% YOY to 1.0%, the largest drop we've seen in our entire history in the industry
• The focus on asking rents can be misleading: executed effective rents were down 4.5% YOY, and likely will drop further

What are you seeing on any changes in the eviction moratorium? Do you have any places where occupancy is high enough that you are considering "cash for keys" policies?

• There is talk about cash for keys at our company, but we're waiting to see what happens with a few areas where evictions might be allowed soon to see what happens before we do. Evictions might be allowed in TX, FL, and GA. Obviously, expect an occupancy hit with evictions across the nation in August and September and trying to get occupancy right now in prep for that

Ed. note: Where you can evict, there is no point in doing cash for keys and where occupancy has dropped, probably no point because you have enough availability. But if you do have places with limited availability and a number of homes that are not economic occupancy right now because someone is taking advantage of the eviction moratorium, that may be a place where you can go to your residents and say, "Look, if you leave and turn in your keys, we won't try to collect on the rent that you owe us, and we won't explicitly file anything with credit agencies."

• Our occupancy has held strong, we just started offering cash for keys for pre-COVID evictions that cannot go to court, and have seen early success. Most are not even asking for cash; they are just happy to walk away with the outstanding debt forgiven 

I was surprised by the asking rent decline reported by RealPage. We are still up for the new rent perspective YOY. I wonder if those on the call are seeing that deep of a drop?

• Net effective rents down 3.5 %
• Seeing pretty large comp drops over the past six weeks
• [National single-family rental operator] Still up on blended net effects in the 4-5% range
• Down 4% using limited targeting concessions as to not to hurt the renewal process
• Seeing similar numbers (down 4%)
• Effective long-term vs. long-term down 3.8% [Ed. note: Good point; I'm glad you added the effective long-term. When you are looking at lease-over-lease on new leases, be very careful not to include a person who moves out with MTM or on a short-term lease as you will have a negative in any case. It is important to compare apples to apples, look at long-term vs. long-term]
• Also seeing [down 4%] with targeted concessions

Ed. note: Speaking for LRO users (those of you on YieldStar can make the translation) we did see a lot of people in the early days not just make the system parameters defend occupancy, but get really conservative on the aggressive factors. With 1% aggressive factors, even when there was an opportunity to go up, it wasn't going up by much. In most cases, urban and coastal are the possible exceptions, we've been advising clients to go back to at least a low season setting of 2% because when you have the opportunity, you should take advantage of it.

Why we fear Sept 1, not May or Jun 1

• $600/wk federal unemployment kicker lasts only 4 months [note: a $1300 rent is "affordable" on $1000/wk pay; $2600 for roommates or 2-income household]
• Seasonality changes from tailwind to headwind in late summer
• Dr. Fauci and the CDC warn of fall resurgence (and co-challenge of seasonal flu)

What does Sept 1 challenge mean to you?

• We are preparing for Sept 1, that is our bigger worry
• We are reinstituting MTM and short-term premiums. Trying to get folks off the fence before the season change
• We've extended no increase on August renewals and continue to offer 24-months on renewals

Ed. Note: We are getting close to September renewal decisions. The question is do you stay conservative on new leases so that you get through September with the absolute highest occupancy? Or do you take advantage of the tailwinds we're seeing, and go for some rate right now, then make your shift in a couple of months to prep for September?

Is anyone making credit screening adjustments down to stimulate demand or up to protect against degradations in score?

• We are keeping cutpoints the same
• Same here, we've kept credit screening the same, scammers have increased
• Due to demand, screening has become both more restrictive and with an additional employment verification
• Keep the screening the same, more scammers trying to get in