2017’s robust demand has been accompanied by a rapid drawdown in the construction pipeline; prior to Hurricane Harvey, Houston’s multifamily market had experienced recent gains in both occupancy and effective rent, pointing towards general tightening.
Overall occupancy increased to 91.2% vs. 88.9% pre-storm
Stabilized Class A occupancy has increased by 200 basis points to 91.9%. This occupancy level assumes damaged units are reclassed from operating to those undergoing renovation.
Overall effective rents have risen by 4.4% YTD vs. 1.7% pre-storm
Year-over-year Class A effective rents are up 6.0% YTD vs. a pre-storm increase of 2.3%, as the market’s most aggressive concessions continue to burn off.
Although some renters will return to their homes in the next six to nine months, demand from recovery efforts and new permanent renters will complement organic growth, which was already forecasted to drive a transition to a landlord’s market in 2019 and beyond.
Economic forecasts show recovery, growth
A variety of Houston area indicators are signaling a brisk recovery and continued growth through 2018; forecast estimates show above trend economic and employment expansion this year and into 2018.