HOUSTON – (By Dale King) – The average rent for an apartment in Houston has dropped $38 a month over the last 12 months, says a report by the Axiometrics, multifamily data firm.
The cost of an average rental unit in Houston was $1,060 a month in March down from the $1,098 recorded in March 2016, the Axiometrics report says.
Houston apartment construction has been strong in recent years. A significant number of new units are being completed, while Houston’s job growth has been weak. Therefore, rents are down and the occupancy rate has been falling.
The Houston apartment occupancy dropped to 91.9 percent in March, down from 93.6 percent in March of last year.
“Even if there isn’t much positive news for the market, the downward trend seems to have halted – or at least slowed,” said Jay Denton, vice president of analytics for Axiometrics, a RealPage company. “Landlords just don’t have leeway to raise rents right now while new supply is still high and job growth has been slow to recover.”
The study says average rents just barely snail-paced a four-month smidge of increases, eking out a gain of only $1 in March compared to February’s level. The $38 year-over-year decrease from March 2016’s average rent marked an annual effective rent decline of 3.4 percent.
Houston’s job growth has been virtually flat-lining at 0.6% for the 12 months ending in February 2017, though the 19,300 jobs added during that period far surpassed the 5,700 created during the previous 12 months.
Meanwhile, the report says, a new supply of rental units is about to hit the market like gangbusters, especially in the urban-core Montrose/River Oaks submarket, where 27 percent of the 20,503 new units identified for delivery this year are being built.
The rolling two-year data for Houston, the report says, show rent growth recovering slightly from its low in December 2016, as well as a small uptick in occupancy.
The number of Houston submarkets with positive rent growth remained at just five in March, the Axiometrics report says: Cloverleaf/Channelview, 1.9%; Pasadena/Deer Park, 0.9%; Northborough/Cranbrook, 0.3%; Sharpstown/Westwood, 0.2% and Spring Branch, 0.2%.
In the March totals, Fondren/Westbury fell into the minus column and Spring Branch inched into positive territory for the first time since May 2016.
The Montrose/River Oaks submarket fell 0.2 percentage points to -7.6% in March, though it remained above its low of -8.9% rent growth last November, says Axiometrics, the Dallas-based firm that provides market information to the apartment and student housing real estate sectors.
On a national level, the apartment occupancy rate hit 94.6 percent in March 2017, down from 95 percent in March of 2016.
May 8, 2017 Realty News Report Copyright 2017