Dallas 2Q23
Multifamily Market Report
$1,587
average rent
93.5%
average occupancy rate
$1.9B*
ytd sales volume
2.3%
YoY rent change
-2.7 POINTS
yoy occupancy change
60*
ytd individual transactions
* Metroplex Total
Supply & Demand
2Q23
3,013 Units
QUARTERLY DEMAND
YTD: 2,762
4,797 Units
QUARTERLY COMPLETIONS
YTD: 8,614
Annual Demand vs Completions
-
Completions
-
Demand
Demand Trends
Q2 2023 marked a positive turnaround for the Dallas-Plano-Irving, TX apartment market, with over 3,013 net units being absorbed. This shift broke a four-quarter streak of negative absorption, demonstrating the resilience of the Dallas apartment market.
Among the 34 Dallas-Plano-Irving, TX submarkets, 23 reported positive net absorption, with the Frisco submarket leading the pack by absorbing 733 units. This figure nearly matched the 820 units that were delivered to the market in the same period.
Completion Trends
In Q2 2023, Dallas’ apartment inventory expanded by 4,797 units. The Frisco submarket contributed the most to this increase, adding 820 units, while the Allen/McKinney submarket ranked second with 529 new units.
Frisco has recently experienced a surge in completions. Over the past year, a substantial portion of new supply has emerged in the northern suburbs, with Frisco single-handedly accounting for 24% of the total deliveries.
Demand Outlook
In the upcoming four quarters, the Dallas apartment market is predicted to maintain a positive demand outlook, with an estimated absorption of 40,913 units. This indicates that demand will likely outstrip the available supply during this period, pointing towards a favorable market condition.
Specifically, the Frisco and Allen/McKinney submarkets are expected to see significant demand, with projected annual absorption totals reaching 5,660 and 5,327 units, respectively.
New Supply Outlook
The Dallas apartment market is poised for significant inventory expansion over the next four quarters, with a substantial increase of 36,871 units projected.
The Frisco and Allen/McKinney submarkets are set to contribute significantly to this growth, with anticipated additions of 6,031 units and 5,523 units respectively.
Occupancy & Rent Trends
RENT VS OWN
MONTHLY PAYMENT
$2,395
Average Monthly Mortgage Payment
$1,587
Average Monthly Rent
Occupancy trends
In the year leading up to Q2 2023, the Dallas market experienced a decline in occupancy rate by 270 basis points year-over-year and 20 basis points quarter-over-quarter, resulting in an overall rate of 93.5%. Analyzing various product classes, Class A units showcased the highest average occupancy level at 93.8%, which is marginally below its five-year average. The Hunt County submarket emerged as a high performer with an impressive occupancy rate of 96.3% in Q2 2023, whereas the Rockwall/Rowlett/Wylie and Southwest Dallas submarkets presented slightly lower rates. Looking forward, it is anticipated that the Dallas market will witness a rebound in occupancy to around 94.4% over the next year, as demand is expected to outpace the projected new supply.
RENTAL TRENDS
Aligning with a nationwide trend, the pace of rate of rent growth in Dallas has slowed compared to the previous year. In Q2 2023, rents for new leases saw a modest year-over-year increase of 2.3%, a figure below the market’s five-year average of 5.7%. Nonetheless, this performance is consistent with trends seen in other southeast markets. With an average rental rate of $1,587 per month, Dallas offers far greater affordability than expensive coastal markets, making it attractive for inbound migration. Dissecting the product classes, Class A units led the pack with a 2.7% annual effective rent change, followed by Class C at 2.9% and Class B at 1.8%. Submarkets like Southeast Dallas and Northwest Dallas experienced robust double-digit annual rent changes. Looking ahead, rents in the Dallas-Plano-Irving area are expected to accelerate in the upcoming year.
Submarket Rent & Occupancy
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Addison/Bent Tree | 93.8% | -2.6% | $1,574 | 1.5% |
| Allen/McKinney | 93.5% | -2.6% | $1,663 | -0.8% |
| Carrollton/Farmers Branch | 94.5% | -2.2% | $1,604 | 3.9% |
| Central/East Plano | 93.5% | -3.1% | $1,615 | 1.1% |
| Denton | 94.1% | -2.7% | $1,413 | 4.4% |
| East Dallas | 94.1% | -2.5% | $1,849 | 4.0% |
| Ellis County | 95.0% | -2.6% | $1,448 | 4.6% |
| Far East Dallas | 92.2% | -3.7% | $1,220 | 5.8% |
| Far North Dallas | 92.8% | -3.6% | $1,360 | -1.0% |
| Frisco | 93.9% | -2.1% | $1,803 | 1.4% |
| Garland | 93.7% | -2.1% | $1,415 | 3.9% |
| Grand Prairie | 93.0% | -3.0% | $1,495 | 1.7% |
| Hunt County | 96.3% | 0.8% | $1,059 | 9.7% |
| Intown Dallas | 93.3% | -1.9% | $2,127 | 0.5% |
| Kaufman County | 92.2% | -5.7% | $1,448 | 7.3% |
| Las Colinas/Coppell | 93.4% | -3.0% | $1,779 | 1.7% |
| Lewisville/Flower Mound | 94.2% | -2.1% | $1,579 | 1.2% |
| Love Field/Medical District | 93.8% | -2.4% | $1,556 | 1.9% |
| Mesquite | 93.3% | -3.6% | $1,271 | 8.1% |
| North Dallas | 92.9% | -2.9% | $1,461 | 4.0% |
| North Irving | 93.1% | -3.5% | $1,435 | 3.5% |
| North Oak Cliff/West Dallas | 93.6% | -2.4% | $1,541 | 3.4% |
| Northeast Dallas | 92.5% | -3.0% | $1,223 | 2.1% |
| Northwest Dallas | 93.6% | -4.2% | $1,249 | 10.0% |
| Oak Lawn/Park Cities | 93.2% | -2.0% | $2,309 | 0.7% |
| Richardson | 93.8% | -3.0% | $1,712 | 2.5% |
| Rockwall/Rowlett/Wylie | 91.6% | -3.9% | $1,616 | -1.6% |
| South Irving | 94.3% | -2.6% | $1,308 | 4.7% |
| Southeast Dallas | 94.1% | -2.5% | $1,149 | 12.3% |
| Southern Dallas County | 93.2% | -2.8% | $1,367 | 2.7% |
| Southwest Dallas | 91.8% | -3.4% | $1,176 | 5.7% |
| The Colony/Far North Carrollton | 94.6% | -1.9% | $1,748 | 2.7% |
| West Plano | 93.8% | -2.1% | $1,833 | 2.2% |
| Zang Triangle/Cedars/Fair Park | 94.6% | -1.9% | $1,427 | -1.6% |
| Dallas-Plano-Irving, TX | 93.5% | -2.7% | $1,587 | 2.3% |
Units by Submarket Delivering in 2023
57,225
Units Under Construction
36,871
Units UC Delivering In the Next 4 Quarters
Units Under Construction
Units Delivering Next 4Q
| Submarket | Units Under Construction | % of Total UC | Units UC Delivering In the Next 4 Quarters |
|---|---|---|---|
| Addison/Bent Tree | 799 | 1% | 512 |
| Allen/McKinney | 10,430 | 18% | 5,523 |
| Carrollton/Farmers Branch | 758 | 1% | 727 |
| Central/East Plano | 2,127 | 4% | 1,385 |
| Denton | 4,167 | 7% | 2,455 |
| East Dallas | 801 | 1% | 568 |
| Ellis County | 1,637 | 3% | 797 |
| Far East Dallas | 56 | 0% | 56 |
| Far North Dallas | 897 | 2% | 657 |
| Frisco | 8,647 | 15% | 6,031 |
| Garland | 1,144 | 2% | 459 |
| Grand Prairie | 3,039 | 5% | 3,007 |
| Hunt County | 152 | 0% | 152 |
| Intown Dallas | 3,926 | 7% | 1,921 |
| Kaufman County | 1,407 | 2% | 702 |
| Las Colinas/Coppell | 2,024 | 4% | 1,060 |
| Lewisville/Flower Mound | 2,649 | 5% | 2,117 |
| Love Field/Medical District | 1,349 | 2% | 878 |
| Mesquite | 0 | 0% | 0 |
| North Dallas | 439 | 1% | 234 |
| North Irving | 0 | 0% | 0 |
| North Oak Cliff/West Dallas | 1,600 | 3% | 1,098 |
| Northeast Dallas | 948 | 2% | 830 |
| Northwest Dallas | 0 | 0% | 0 |
| Oak Lawn/Park Cities | 857 | 1% | 128 |
| Richardson | 1,095 | 2% | 711 |
| Rockwall/Rowlett/Wylie | 2,595 | 5% | 2,353 |
| South Irving | 0 | 0% | 0 |
| Southeast Dallas | 0 | 0% | 0 |
| Southern Dallas County | 65 | 0% | 65 |
| Southwest Dallas | 866 | 2% | 671 |
| The Colony/Far North Carrollton | 1,564 | 3% | 627 |
| West Plano | 0 | 0% | 0 |
| Zang Triangle/Cedars/Fair Park | 1,187 | 2% | 1,147 |
| Dallas-Plano-Irving, TX | 57,225 | 100% | 36,871 |
Sales Activity
The migration shift induced by the pandemic has redirected investor attention towards high-growth markets like Dallas in recent years. With its robust economic and demographic drivers, low entry costs, and solid multifamily fundamentals, Dallas has become a magnet for investors. This has led to record levels of capital being deployed in the metroplex over the past decade. In the first half of 2023, the Dallas market exhibited resilient transaction activity of conventional multifamily assets, with approximately $1.3 billion exchanged across 60 properties, as reported by Real Capital Analytics. Despite representing a 70% decline compared to the same period in the previous year, Dallas continues to rank among the top markets nationally in terms of total sales volume. The average price per unit for these transactions stood at $190,200, denoting a 2.5% decrease year-over-year.
- Weidner Apt Homes
- Tides Equities
- Blackstone
- Western Wealth Capital
- Madera Equity
- Conti Capital
- Intercapital
- Provident Realty Advisors
- SPI Advisory
- German American Realty
TRANSACTION VOLUME
YTD Transaction Volume
Y-O-Y Change
Individual Transaction Count
Price Per Unit
Annual Price Change
* Transaction data is for the whole Metroplex
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual conventional MF transaction $2.5M +
Economy
During the second quarter of 2023, the Dallas metropolitan area experienced notable economic growth, with a 4.9% expansion in its Gross Domestic Product (GDP). This expansion coincided with a net gain of 172,300 jobs, representing a 4.2% increase in employment. In May, the unemployment rate stood at 3.8%, just above the national average of 3.4%. Among the various sectors, the professional and business services industry saw the most significant job gains, with the addition of 36,100 positions, reflecting a 4.8% expansion. The education/health services sector also reported a notable increase of 5.0%, adding 23,900 jobs. Despite the initial job losses caused by the pandemic, the local economy has rebounded strongly, adding the highest number of jobs since the downturn began, totaling 345,000 jobs since February 2020. The Dallas metropolitan area continues to be a frontrunner in terms of economic and demographic growth in the country.
172.3K
May Annual Jobs Created
4.2%
May 23 Employment growth
3.8%
May 23 Unemployment rate
3.4% us may rate
Top 5 Employment Sector Annual Change
Hover over icons to view data
| Sector | Change from May 2022 to May 2023 | Percent Change |
|---|---|---|
| Mining, logging, and construction | 12,300 | 5.30% |
| Manufacturing | 7,400 | 2.50% |
| Trade, transportation, and utilities | 23,300 | 2.70% |
| Information | 4,600 | 5.10% |
| Financial activities | 15,600 | 4.40% |
| Professional and business services | 36,100 | 4.80% |
| Education and health services | 23,900 | 5.00% |
| Leisure and hospitality | 21,300 | 5.30% |
| Other services | 12,000 | 9.40% |
| Government | 15,800 | 3.40% |
Major Economic Developments
Texas Instruments - Sherman Facility
$30B Total Investment
3K Permanent Jobs Created
500 Acre Site Fab Size
Sherman, TX Location
Electronics Manufacturing Industry
2025 Timeline
Dallas Convention Center
$3B Total Investment
Downtown Dallas Location
2.5M SF Facility Size
Feb. 2022 Approved
2028 Completion Timeline
Wells Fargo Irving Campus
$455M Total Investment
6,800 Employees Campus Size
Banking & Financial Services Industry
Iriving, TX Location
End of 2025 Timeline
Market Outlook
Investors continue to express strong interest in the Dallas market. As of Q2 2023, more than 40,900 apartment units were in the process of construction, with nearly 36,871 units expected to be completed within the next four quarters. Despite this substantial pipeline of incoming units, current market projections suggest that heightened demand will successfully absorb this supply within the coming year. This demand-supply interplay is expected to instigate a rebound in occupancy rates and rent performance by mid-2024. In the face of this robust development activity, Dallas remains an attractive investment target, due in part to its resilient economy and favorable demographic trends. Investors have been particularly drawn to the area’s steady job growth, affluent population, and rising household formations. These factors have helped sustain rental demand, allowing the market to absorb new units and maintain stable occupancy rates despite the ongoing construction surge. This broad-based interest underscores the resilience and growth potential of the Dallas apartment market, positioning it well for continued performance strength in the face of an expanding inventory.
Sources: RealPage; BLS; MSCI; Dallas Business Journal; Economic Development Corporation of Dallas
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