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Houston Apartment Rents Dropped Almost 4 Percent in Last Year

HOUSTON – Houston apartment rents dropped 3.7 percent in November from November of 2015, according to a new report by Axiometrics, a multifamily data firm.

Houston, which has an overbuilt apartment market, had an average monthly apartment rent of $1,053, down from $1,094 a year ago. By comparison, the national average rent is $1,278, Axiometrics reports.

The oversupply of apartments has been concentrated in the upscale Class A market, while vacancy is tight in the Class B and C sectors.

Citywide, Houston’s occupancy rate dropped to 91.8 percent in November, down from 93.2 in November 2015. Occupancy took a sharp dip this fall after registering a 92.3 percent occupancy rate in October.

Axiometrics reports 21,673 new apartment units will be completed in 2016.

But the oversupply problem is not over. Another 18,132 units are in the pipeline for completion in 2017.

Axiometrics reports 19 Houston submarkets had declining rents in November. Houston’s Montrose/River Oaks submarket, where apartment construction has been robust, suffered an 8.6 percent decline in rent in November.

Two positive factors: Much of the continuing new construction (about three-quarters) will be completed in the first half of 2017. And Houston is also expected to have positive job growth next year. These two developments will lead Houston multifamily market to rising rents at the end of 2017, the Axiometrics firm predicts.

Dec. 19, 2016 Realty News Report Copyright 2016

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