Houston Apartment Market Update

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The Houston area multifamily sector recorded positive metrics in April, but did not change significantly over the previous month. While Houston was second only to New York in the number of multifamily permits (5,169) received in 2010*, the market continues to struggle with occupancy and rental rates. Overall occupancy improved marginally, while remaining under 88% -- a figure last achieved in March 2009. Although Class A occupancy crossed 93% for the first time, rental rates did not increase in a corresponding fashion; rental averages recorded significant decreases (-$0.001 per square foot to close at $1.175 and -$1.19 per unit to close at $1,117.07).

The overall rental average per square foot has remained unchanged since January, and the per unit average has continued to decrease. Signaling rising demand, absorption came down for all classes with Class A numbers down 50% from March. Of the approximate 4,000 units under construction, more than 50% are currently pre-leasing. The more than 400 units that are expected to be delivered in May are almost evenly split between Class A communities and Class B Senior Tax Credit communities. Because of this, the metrics should remain on a stable path. 

Houston apartment market occupancy increased 0.30% points over the adjusted figure of the previous month to 87.80% in April and increased by 1.78% points over April 2010. Average rents per square foot remained unchanged compared to March, and are up $0.006 over April 2010. Average rent per unit decreased by $0.23 to $767.85, while the average increased by $7.57 over April 2010. Monthly absorption was positive 2,074 units, while annual absorption (rolling twelve months) totals positive 3,141 units.

Houston Apartment Market
Key Metrics

Occupancy

    87.80%

Monthly Change

+ 0.30%

Annual Change

+ 1.78%

Rent / Unit

$767.85

Monthly Change

- $0.23

Annual Change

+ $7.57

Rent / SF

$0.888

Monthly Change

-

Annual Change

+ $0.006

Monthly Absorption

+ 2,074

Annual Absorption

+ 11,827

Units U/C

4,127

Units Planned

3,141


Quality real estate market data provides decision makers the information to make informed decisions. O'Connor & Associates has been providing market data since 1988. Timely, accurate real estate data also provides the information our real estate appraisers, consultants, and property tax consultants need. The Market Research and Consulting division of O'Connor & Associates provides information necessary to make decision to commercial real estate professionals.

Occupancy and Rental Data, ownership and management information are routinely gathered for four major land uses - multifamily, office, retail and industrial. This information allows investors to compare competitive properties, facilitate business decisions and track market and submarket performance. In addition the data is useful to brokers who for example continually monitor Houston retail space leasing, Austin Office Space Houston office space leasing, Dallas retail space leasing, Dallas industrial leasing, Austin Retail Data Houston industrial space leasing, Houston apartments, Dallas apartments, Fort Worth apartments, Austin apartments, and San Antonio apartments.

Patrick C. O'Connor has been president of O'Connor & Associates since 1983 and is a recipient of the prestigious MAI designation from the Appraisal Institute. He is also an registered senior property tax consultant in the state of Texas and has written numerous articles in state and national publications on reducing property taxes. He continues to set the standard in direction and quality of our appraisal products, adding services ranging from business valuations and business appraisals to cost segregation analysis for income tax reduction.

http://www.oconnordata.com

 

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