HOUSTON – (Realty News Report) – In September, Houstonians leased a record number of single-family homes as recovery from Hurricane Harvey drove an extraordinary 86 percent surge in rental activity.
With an estimated 70,000 homes damaged by the storm, many homeowners had no choice but to seek rental housing while repairs or rebuilding were underway.
Following Harvey’s landfall on Aug. 25, the pace of leasing reached levels not previously seen in the Houston market, according to the Houston Association of Realtors (HAR).
Some 4,233 single-family homes were rented in September, a sharp rise from 2,305 in September 2016. HAR reports this was the highest monthly rental total in Houston real estate history.
Townhouse and condominium rentals also surged: 982 units were leased, up 92 percent from 511 a year earlier, HAR statistics show.
Leasing activity in apartment complexes was likewise exceptionally strong.
“I have spoken with a developer whose 90 percent occupied Class A multifamily property in Katy jumped to 100 percent occupancy overnight,” said Teresa Lowery, Senior Managing Director, multifamily, in the Houston office of Colliers International.
Demand for rentals rose not only from displaced homeowners waiting on repairs or reconstruction, but also from insurance adjusters, FEMA staff, and construction crews who rented housing while working in the region.
The market tightened further because the storm damaged many apartment communities. Estimates vary, but some multifamily analysts reported that more than 40,000 apartment units flooded.
Prior to the storm, Houston’s multifamily market showed some softness, with landlords offering concessions such as up to three months free rent. Those incentives vanished once Harvey struck.
The apartment sector became healthy almost overnight.
“Harvey effectively accelerated the multifamily recovery timeline, propelling Houston into a landlord-favored market 18 months ahead of schedule,” said Robert Kramp, director of research & analysis at CBRE. “The occupancy spike driven by Harvey is expected to persist. In addition, most rental concessions have expired. A subdued development pipeline combined with sustained recovery-driven demand should push vacancy rates lower.”
Citywide, apartment rents rose 1.5 percent, CBRE reported.
HAR reported the average rent for single-family homes increased 7.9 percent to $1,886, while the average rent for townhomes and condominiums climbed 5.4 percent to $1,601.
Hurricane Harvey, an unusually powerful Category 4 storm, lingered nearly stationary for days and dumped as much as 50 inches of rain on parts of the Houston region.