HOUSTON – (By Dale King, Realty News Report) – For much of the city’s rental community, the summer of 2020 has been a period of discontent, says the latest monthly report from ApartmentData.com., a firm that tracks performance of the multifamily market.
The early pre-COVID-19 days of the year saw occupancy levels increase to more than 90 percent, but the price of rental units within the city and its environs had already started a significant drop last October. The rate continued to decline month after month until, in March of 2020, the rental cost took a dying-breath jump to about $1,056 a month before falling into the high $1,040 area, where it currently resides.
The drop-off – the result of the global coronavirus pandemic which has brought chaos to many real estate markets around the world as well as in Texas – has yet to make a complete turnaround.
The overview for Houston as September 2020 arrived showed the apartment occupancy rate at 89.0 percent, a level that carried over from July and August without change. The average price of a rental unit going into September was $1,044 per month, a couple of dollars decrease from the July figure which had taken an upward crook after a four-month deterioration.
A few months ago, ApartmentData.com President Bruce McClenny noted that the “months of March-April-May and into July are the months where we see more demand. And so rents rise year after year. But this is a drastic change from that — and understandably so.”
Because of the continuing pandemic, many renters are running out of cash. And with eviction prohibitions running out and unemployment benefits on their last legs, “more people are leaving apartments than are signing up for new leases, leading to negative absorption, an indicator of supply and demand,” said McClenny.
In May, Houston typically sees around 1,800 net new leases. This May, it was minus 200, according to ApartmentData.com’s findings.
The monthly report also lists the following for Houston:
- Rental rate growth for the past 12 months, minus-.8 percent.
- 8,772 units absorbed.
61 Apartment Complexes Under Construction
Currently, 2,883 apartment communities give Houston a total supply of 679,580 units. This includes 81 communities and 22,419 rentals that were completed within the past 12 months.
In the wings, are 61 communities (17,457 units) under construction. Proposed after that are 93 more communities that will bring another 27,862 units.
Noteworthy new projects include the 46-story, 373-unit tower under construction in downtown by Hines. Named “The Preston”, the building is slated for completion in 2021. The project is being built on a half-block (about three-fourths of an acre) bounded by Preston, Milam & Prairie streets on Block 42. The site was formerly used for the parking garage of the Houston Chronicle.
Across the Houston metro area, there is good news to report, says ApartmentData.com. The following submarkets are listed as the “hottest” for the last three months:
- 1, Conroe North/Montgomery, annualized growth of 8.9 percent; 2.9 percent absorbed.
- 2, Clear Lake/Webster/League City, annualized growth, 10.0 percent; 1.6 percent absorbed.
- 3, I-69 North, annualized growth of 10.9 percent; 1.2 percent absorbed.
- 4, Dickinson/Galveston, annualized growth of 10.7 percent; 1.4 percent absorbed.
- 5, Sugar Land/Stafford/Sienna, annualized growth of 12.9 percent; 1.1 percent absorbed.
Sept. 9, 2020 Realty News Report Copyright 2020
Caption: The Preston, a 373-unit apartment tower is under construction in downtown Houston by Hines. Photo Credit: Ralph Bivins, Realty News Report. Copyright 2020.
File: Houston September Apartment Report