Curious about what lies ahead for the community association management industry in 2023? We were too.
The community association management industry is poised for growth and faces both opportunities and challenges in 2023. In a survey conducted by Buildium, insights from 240 community association managers and board members shed light on the trends that will shape the industry. This article explores six key trends and challenges that community association management companies should be aware of as they navigate the year ahead.
Addressing the Labor Shortage
The persistent labor shortage continues to impact community association management companies. Finding and retaining competent staff remains a top priority, particularly as smaller firms compete with larger companies and developers for talent. The survey reveals that staffing is the second-highest priority for companies planning to expand their portfolios in 2023 and beyond.
Leveraging Technology for Efficiency
With the need to accomplish more with fewer resources, maximizing efficiency becomes crucial for community association management teams. Technology plays a vital role in streamlining processes such as payments, communications, and accounting, allowing teams to focus on customer service and business development. Over half of the surveyed companies see technology-driven efficiency as a key revenue generation strategy for 2023.
Competition for Clients
Delivering High-Quality Customer Service
The competition among management companies for clients highlights the importance of delivering high-quality customer service. Smaller companies can leverage their competitive advantage by providing personalized service tailored to the needs of association board members. Building strong relationships and emphasizing personalized attention can help smaller firms stand out in a market dominated by larger companies.
Capitalizing on Growth Opportunities
The rise in new housing developments presents growth opportunities for community association managers. The majority of new homes for sale are located within community associations, and it is expected that thousands of new associations will form in 2023. This presents a chance for management companies to attract new clients and expand
Balancing Price and Competition
Finding a balance between increasing prices and remaining competitive poses a profitability challenge for management companies. Rising costs, including materials, labor, insurance, and taxes, put pressure on associations and management companies alike. While some companies feel compelled to keep prices low, the survey reveals that a significant portion believes it is necessary to raise prices in order to cover expenses. Additionally, exploring new service offerings may open up new revenue streams.
Board Member Recruitment
Engaging and Knowledgeable Board Members
Community associations face difficulties in recruiting engaged and knowledgeable board members. The survey highlights the challenges of finding the necessary people and resources to sustain the community. With an aging demographic among current board members, finding younger homeowners willing to get involved becomes critical. Turnover and a lack of knowledge among board members can hinder decision-making processes.
Q1: What are the top priorities for community association management companies in 2023?
A1: According to the survey, the top priorities for management companies in 2023 include expanding portfolios, addressing staffing needs, and maximizing efficiency through technology.
Q2: How can smaller community association management companies compete with larger firms? A2: Smaller companies can differentiate themselves by delivering personalized customer service tailored to the specific needs of association board members. Building strong relationships and providing attention to detail can help smaller firms stand out.
Q3: What are the growth opportunities for community association management companies in 2023?
A3: The rise in new housing developments presents growth opportunities, as the majority of new homes for sale are located within community associations. Management companies can capitalize on this growth by attracting new clients and expanding their portfolios.
Q4: How can community association management companies address profitability challenges?
A4: Balancing price increases with remaining competitive is a challenge. While some companies may feel the need to keep prices low, raising prices to cover expenses may be necessary. Exploring new service offerings can also open up additional revenue streams.
Q5: What are the key challenges in board member recruitment for community associations?
A5: Community associations face challenges in recruiting engaged and knowledgeable board members. The survey reveals difficulties in finding younger homeowners willing to get involved and the frustration caused by frequent turnover and a lack of knowledge among board members.
In conclusion, community association management companies should be aware of these key trends and challenges in 2023. By addressing staffing needs, leveraging technology, delivering high-quality customer service, capitalizing on growth opportunities, managing profitability, and addressing board member recruitment, companies can navigate the evolving landscape and position themselves for success in the industry.