Construction underway on a Montorse-area apartment complex. Houston has experienced fast risings rents and is building more and more projects to make up for shortage. (Mayra Beltran / Houston Chronicle)
Recent data shows that apartment rents are increasing at the fastest pace on record in the Houston region, at the same time households are shifting from owning to renting.
CBRE, a Los Angeles-based real estate brokerage firm with offices in Houston, analyzed second-quarter data that rank Houston among the markets with a growing demand for multifamily developments. Others include Dallas, New York City, Los Angeles, Austin, Atlanta, Washington, D.C., Seattle, Denver, Orlando, Raleigh, N.C., Tampa, Fla., and Boston.
According to the firm, Houston’s multifamily market is seeing positive absorption, fast rent growth, plenty of new construction, and strong investor interest. Rents are growing at the fastest pace on record, 4.9 percent overall year over year, according to CBRE. More than 18,000 new units are expected in the market by the end of 2014. According to Real Capital Analytics, Houston posted $1.2 billion in multifamily sales in the second quarter of this year, a gain of 48 percent from the first quarter.
“Although new supply is robust, new units continue to trail demand, which has been driven by significant net migration and job growth. Houston added 370,000 new jobs since the recovery began and expanded by more new residents than any other U.S. metro in 2013,” Sara Rutledge, director of research and analysis at CBRE, said in a statement. “The local economic expansion also supports steady household income growth, helping to maintain affordability despite strong multifamily rent growth.”
Data analyzed by Houston-based Apartment Data Services also shows steep rent increases across the region, not just in desirable Inner Loop areas.
Here is a breakdown of some of top rising rents in each sub-market for the last 12 months:
Central: Heights, 9.5 percent increase
Northeast: Greenspoint, 9.2 percent increase
Northwest: Tomball/Far Northwest, 14.1 percent increase
Southeast: Gulfgate/Almeda Mall, 8.1 percent increase
Southwest: West Memorial/Briar Forest, 14. 4 percent increase
Source Houston Chronicle 8-2014
by Erin Mulvany
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