Houston metro renting in first half of 2017 outpaced absorption for all 2016

Houston’s apartment demand surged in the first half of 2017, with continued signs of stabilization throughout the metropolitan area, according to Berkadia’s Q2 2017 Houston Multifamily Report. Renters newly occupied 11,636 units during the first half of 2017, surpassing the 4,474 units absorbed in all of 2016.

Continued apartment demand, coupled with less new inventory, has elevated apartment occupancy by 50 basis points since December 2016 to 88.9%. Since the start of 2017, 9,620 apartment units have been delivered.

“The growing local economy and decreasing construction pipeline are leading to improved multifamily fundamentals across the Houston region,” said Epstein. “Apartment demand is returning, and a slim pipeline of future development is translating into much more investment activity interest in Houston.”

The report also includes good news on Houston’s overall economy: employers accelerated hiring in the last year, underpinning the rise in rental demand. Government agencies added a metro-leading 12,700 positions and hiring was also robust in the leisure and hospitality industry, where 12,300 positions were added since May 2016.

Other highlights of the report:

Rental demand was strongest in the Inwood/Hwy 249 submarket, which had an occupancy rate of 95.3% during the second quarter

Metro-wide effective rent advanced to $982 per month in June 2017, a 1.6% increase since the first quarter of 2017 (and a 0.1% decrease year over year)

The 463-unit Market Square Tower was the largest property to have units begin lease-up in December 2016, while the majority of the www.berkadia.com.

About Berkadia®:

Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corporation, is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets.

To learn more about Berkadia, please visit www.berkadia.com.