HOUSTON – (By Dale King, Realty News Report) – As a rising tide lifts all boats, soaring single-family home sales figures in Houston are helping the rental marketplace spiral upward as well, says Colliers report on the multifamily market for Quarter 2 of 2021.
“Houston’s single-family home sales increased 13.6% year-over-year, pushing home prices to record levels,” says Colliers. “This in turn has boosted the multifamily market, pushing occupancy levels from 88.4% in Q2 2020 to 90.7% in Q2 2021.”
“The average monthly rent for multifamily units increased from $1,047 to $1,116, a 7% annual increase.” In addition, “demand tripled between quarters, with more than 15,800 units absorbed in Q2 compared to almost 4,800 in Q1. There are more than 16,000 units under construction and another 28,000 units are proposed.”
New projects started recently include McNair Interests, which is affiliated with the ownership of the NFL’s Houston Texans, which broke ground on a 330-unit apartment complex in the Westchase District in West Houston. Located at 400 West Sam Houston Parkway South at Deerwood Road, the 400,000-SF apartment project, is called Remy on the Trails
The Colliers report covers the Houston-The Woodlands-Sugar Land metropolitan area with a population of 7.2 million – a total that has grown 7.5% over the last five years. The populace is forecast to grow 7.6% between 2020 and 2025.
The in-migration to Houston is driving the housing expansion. Houston ranks alongside Dallas and Phoenix as the top markets for population gain through relocation, Zonda reports.
The multifamily market is improving in many markets across the nation.
Nationally, multifamily asking rents jumped another 8.3 percent in July, bringing the year-to-date increase to a record-shattering 8 percent. Overall, national average rents grew $26 in July to $1,510, reports Yardi®Matrix.
The back-to-back record months reflect a faster than expected recovery for the multifamily market but especially for gateway metros, which are quickly making up lost ground. San Jose (3.6 percent growth) leads, followed by Boston (3.2 percent) and New York (3 percent). Of the 140 metros that Yardi Matrix covers, 50 had double-digit year-over-year (YoY) rent growth in July, and 129 out of 140 had positive YoY growth.
The report notes that rents for single-family rentals in build-to-rent communities continue to grow at an even faster pace than multifamily, with national rents up 12.8 percent YoY. Occupancy continues to rise as well, up 1.2 percent YoY.
“The demand for multifamily has produced a remarkable recovery across the country,” say Matrix analysts. “The recovery of the multifamily industry is no longer limited to the Southeast and Southwest metros that have fared well during the pandemic – it’s nationwide.”
Houston is one of the largest apartment markets in the country.
According to Colliers, Houston has 180,126 Class A rental units, 241,890 Class B apartments, 210,062 Class C units and 61,722 residential rental spaces. Average monthly rental prices range from $1,581 for Class A to $691 for Class D.
Occupancy levels for each class of apartment, the Colliers report says, are Class A, 86.4%, up from 83%; Class B, 93.3%, up from 91.6%; Class C, 91.5%, up from 90.3% and Class D, 90.3%, up from 89.6%
Aug 12, 2021 Realty News Report Copyright 2021
Photo: By Ralph Bivins, Realty News Report Copyright 2021
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File: Multifamily Also Rises in Houston
File: Colliers. Multifamily Also Rises in Houston as population grows. Rents. McNair.