HOUSTON – Local residents in need of short-term housing after Harvey boosted the rental market, says Marcus & Millichap's Houston multifamily market report for first quarter 2018.
Displaced residents as well as individuals moving to help with relief efforts filled nearly 14,000 apartments in the final quarter of the year. That is the strongest quarterly absorption total since the end of 2005.
Apartment developers completed 20,800 units last year, making 2017 the second consecutive year completions topped 20,000 units.
Vacancy decreased 150 basis points year over year to 6.2 percent in December. The strong demand from residents seeking temporary housing after Harvey's flooding facilitated the first vacancy decline since 2014. With this increase in demand, effective rents grew 7.2 percent year over year to an average of $1,080 per month.
Deliveries are expected to fall in 2018. Marcus & Millichap predicts 12,400 units will come online this year. Tenants moving back into permanent housing should push vacancy up 50 basis points to 6.7 percent.
Effective rent growth is expected to moderate, increasing an estimated 2.7 percent to $1,109 per month.