HOUSTON – (By Dale King, Realty News Report) – The summer of 2020 has been a challenging period for many renters across Houston, according to the latest monthly report from ApartmentData.com, a firm that monitors multifamily market performance.
Before the COVID-19 outbreak, occupancy had climbed above 90 percent, but rental rates had already begun a noticeable decline starting in October of the previous year. That downward trend continued through the winter months. In March 2020, rents briefly ticked up to about $1,056 per month, then slipped back into the low-to-mid $1,040s, where they currently sit.
The decline—driven largely by the global coronavirus pandemic that has disrupted real estate markets worldwide and across Texas—has not yet reversed.
As September 2020 began, Houston’s apartment occupancy rate stood at 89.0 percent, unchanged from July and August. The average monthly rent entering September was $1,044, a slight decrease from July after that month briefly showed an uptick following several months of declines.
ApartmentData.com President Bruce McClenny previously observed that March through July are typically the months with higher demand when rents rise year over year. “But this is a drastic change from that—and understandably so,” he said.
The ongoing pandemic has strained many renters’ finances. With eviction moratoriums expiring and unemployment benefits tapering, McClenny noted that more people are vacating apartments than are signing new leases, producing negative absorption—a key supply-and-demand indicator.
For example, May usually yields roughly 1,800 net new leases in Houston; in May 2020 the market recorded a net loss of about 200 leases, according to ApartmentData.com.
The report also highlights these Houston metrics:
- 12-month rental rate change: -0.8 percent
- Units absorbed over the past year: 8,772
61 Apartment Complexes Under Construction
Greater Houston currently has 2,883 apartment communities totaling 679,580 units. That inventory includes 81 communities and 22,419 units completed within the past 12 months.
There are 61 communities—representing 17,457 units—now under construction, and another 93 proposed projects that would add approximately 27,862 units if completed.
One prominent development is a 46-story, 373-unit tower in downtown Houston being developed by Hines. Named “The Preston,” the project is slated for completion in 2021 and occupies roughly three-quarters of an acre bounded by Preston, Milam and Prairie streets on Block 42—the former site of the Houston Chronicle parking garage.
Across the Houston metro area, ApartmentData.com identified several submarkets that have performed strongest over the past three months:
- Conroe North/Montgomery: annualized growth 8.9%; 2.9% absorbed
- Clear Lake/Webster/League City: annualized growth 10.0%; 1.6% absorbed
- I-69 North: annualized growth 10.9%; 1.2% absorbed
- Dickinson/Galveston: annualized growth 10.7%; 1.4% absorbed
- Sugar Land/Stafford/Sienna: annualized growth 12.9%; 1.1% absorbed
Sept. 9, 2020 Realty News Report Copyright 2020
Caption: The Preston, a 373-unit apartment tower under construction in downtown Houston by Hines. Photo Credit: Ralph Bivins, Realty News Report. Copyright 2020.
File: Houston September Apartment Report
