MPF: Houston multifamily trends 1Q 2015

HOUSTON – Houston’s apartment market was surprisingly slow to generate momentum following the recession. But in mid-2011, Houston’s economy entered into a boom period and the apartment market quickly responded.

Massive numbers of new jobs generated very healthy housing demand, pumping up apartment occupancy rates and rent growth levels in areas with high employment concentrations.

The result for the metro overall has been stabilized occupancy above pre-recession highs and consistently strong rent change performances.

In fact, occupancy remained around 94 percent and annual rent growth came in at 5.0 percent in first quarter 2015, both very strong numbers for the metro.

However, recent concerns in Houston’s energy sector, which is already showing some effect on the economy, have raised questions about the metro’s apartment performance going forward.

At the same time, apartment construction levels are surging in Houston, with completion levels set to nearly double in the year ahead.

What changed this quarter? Apartment demand outpaced new supply in Houston during first quarter 2015.

As a result of strong demand, occupancy increased 0.3 points in the quarter, to 94.1 percent. Meanwhile, apartment operators pushed rents 0.7 percent quarter-over-quarter, taking year-over-year growth to 5.0 percent.

A submarket map and additional information are available at MPF Research.