average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
ytd individual transactions
QUARTERLY DEMAND
YTD: 2,762
QUARTERLY COMPLETIONS
YTD: 8,614
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.
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.
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.
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.
Average Monthly Mortgage Payment
Average Monthly Rent
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.
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 | 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 Under Construction
Units UC Delivering In the Next 4 Quarters
| 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 |
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.
* Transaction data is for the whole Metroplex
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual conventional MF transaction $2.5M +
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.
May Annual Jobs Created
May 23 Employment growth
May 23 Unemployment rate
3.4% us may rate
| 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% |
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.
