Amid high multifamily occupancy, landlords might have even more room to raise monthly rents in Houston, where the average $1.42 per SF still remains among the lowest rates in Texas.
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Apartment occupancy averaged 95% in the second quarter of 2022, with absorption over the last year vastly outpacing new Houston units. And nearly every submarket reported higher occupancy, according to midyear data from Berkadia.
Rents spiked 12.8% over the last year, versus 2.8% year-over-year in 2021, akin to rental raises throughout the country, per the report, though Houston remains significantly cheaper than the rest of the nation. Elsewhere in Texas, San Antonio averaged the same asking rental rate per SF, making both San Antonio and Houston less pricey than Dallas, which averaged $1.73 per SF, and Austin, where rents ran $1.93 per SF, according to August ApartmentData.com data.
"Locally, the Houston metro has been experiencing slight increases in unemployment and overall decelerated activity. However, as it remains, expected job growth in addition to other market fundamentals such as rents, absorption and deliveries, remain positive for the remainder of 2022," CBRE stated in a Q2 report. "This outlook coupled with optimistic broker sentiment points to continued growth for the Houston multifamily market."
Within Houston, the downtown/Montrose/River Oaks and Heights/Washington Avenue areas are leading new units in the city. More units are being delivered within the trendy Montrose area, with about 1,200 units expected to come online through the latter half of the year. Roughly half of those will be mid- and high-rise units.
"Apartment developers remained bullish on the Houston market with healthy apartment fundamentals and demographic trends recently," Berkadia stated.
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