Construction’s slow pace due to disruptions and crew shortages come as renters make the move back into urban housing
HOUSTON (May 21, 2021) – Houston’s multifamily market is set to rebound following a first quarter that showed a slowdown in deliveries and consistent demand for rentals. According to Berkadia’s latest report on occupancy rent trends, after a five-year high of 21,270 units came online in 2020, just 1,255 were completed in Q1 2021, with approximately 4,000 units being leased. Over three quarters of those deliveries were in the Central Houston region as developers look to tap into the lack of available housing in the urban core.
Two such properties near Downtown Houston include the newly-built 15th Street Flats, built in 2020 and located at 1414 N Shepherd Dr and Heights Waterworks, built in 2019 and situated at 515 W 20th St. Following an accompanying trend of renters consistently choosing urban areas over the suburbs, both properties have been placed on the market by Senior Managing Directors Chris Curry and Todd Marix alongside Managing Directors Chris Young and Joey Rippel of Berkadia Houston.
“Houston’s role as a leader in office occupancy, its growing economy, and better yields and exit caps compared to Dallas and Austin provide the fundamentals necessary to fortify its rebounding multifamily market,” said Curry. “The city’s affordability relative to the rest of the nation, and the consistent return of renters choosing urban over suburban rentals, make this a viable market for investors as new residents continue to make the move in and around the metro area.”
Additional findings include:
- Average apartment occupancy increased 40 basis points quarter over quarter to 88.9%
- Monthly effective rent advanced on average over the same period from 1.3% to $1,055
- The Houston MSA saw a 1.3% population increase from 7.2 million to 7.3 million from Q1 2020 to Q1 2021