HOUSTON – (By Dale King, Realty News Report) – Several reports analyzing the Texas apartment market documented spikes in rents, occupancy rates and unit absorption during the summer of 2021. It was a stark contrast to the summer 2020 when the early peak of the coronavirus pandemic crunched the real estate arena.
Houston Market Better Than Austin’s?
The September 2021 analysis from ApartmentData.com says apartment absorption in Houston “continues to be strong. It’s interesting that Houston now seems to be on par with Austin in terms of occupancy and rental rate growth. Many in the multifamily industry hopes this trend holds up.”
Houston’s increases in both rents and occupancy levels have been evident for at least five months, following more than a year of softness, according to a report prepared by Bruce McClenny, president of ApartmentData.com.
The cost of leasing and a hike in occupancy levels that started in April 2021 have continued through September, and the market shows no sign of slowing down.
The comparison between Austin and Houston? Both cities report rent and occupancy improvements. ApartmentData.com says 91.7 percent of rental units in Houston are occupied while Austin has 91.9 percent occupancy in its multifamily residences.
Average Rent: $1,516 a Month
Otherwise, the average price of a unit in Houston is $1,155 a month compared to $1,516 per month in the state capital city, which has one of the hottest economies in the nation.
That average price gets an 887 SF unit in Houston and an 886 SF domicile in Austin.
The ApartmentData.com report says Austin’s rental rates has jumped 20.9 percent over the past 12 months and 18,587 units have been absorbed.
During that same period, the price of leasing an apartment in Houston increased by 10.6 percent. But a lot more units got snatched up in H-town as 33,451 units were absorbed.
As the figures seem to indicate – and the ApartmentData.com report confirms – Austin’s multifamily supply is smaller with 260,623 units in 1,100 communities. Houston has a much larger inventory of apartments – 696,883 units – spread among 2,954 projects.
For the record, Dallas/Fort Worth reports a 92.7 percent occupancy level as the calendar flips to September, with the average price at $1,332 for an 878 SF dwelling. The metropolitan’s rental rate increased 14.2 percent over the past 12 months and 37,594 units were absorbed.
In San Antonio, says McClenny’s most recent compilation, occupancy matches D/FW exactly, at 92.7 percent, but rents are quite a bit lower, at $1,103 a month for an 856 SF unit. The rental rate grew 11.2 percent during the past 12-month period while 10,526 units were absorbed.
Dallas/Fort Worth has 793,825 multifamily units available in 3,317 communities. At the same time, San Antonio has 207,709 units spread among 967 neighborhoods.
McClenny’s report for September says the five “hottest” submarkets in the Houston environs all recorded growth just above or just under one-third for the past three months, along with respectable absorption rates.
Houston’s Tomball/Spring area grew the most, 34.6 percent, with absorption listed at 7.3 percent.
A combination of decent growth and a high absorption rate placed The Heights and its nearly major thoroughfare of Washington Avenue into second place. The growth rate was 29.8 percent while 6.2 percent of units that were available three months ago were snatched up.
Coming in third was the Montrose/Museum/Midtown area, falling in with a 30.3 percent growth figure combined with 3.8 percent absorption level.
Fourth place went to Katy/Cinco Ranch/Waterside with 31.2 percent growth and a 3.3 percent absorption level. Coming in fifth was the Highland Village/Upper Kirby/West University region, growing 28.2 percent. The level of absorption ranked at 3.9 percent.
Sept. 6, 2021 Realty News Report Copyright 2021
Photo: The Morgan, a 504-unit apartment community at 1801 Wells Branch Parkway in Austin has been acquired by a partnership of Archway Equities and CAF Capital Partners. Image courtesy: Archway Equities, CAF Capital Partners, via DB&R Marketing Communications.
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
File: Texas Apartment Industry Skyrockets
File: Bruce McClenny. Texas Apartment Industry Skyrockets after Covid 2020 impact. Archway Equities, CAF Capital Partners.