Houston’s multifaceted economic transformation, which expanded beyond the energy sector, brought forth gains for the Houston apartment market. Yet, looming challenges on the horizon cannot be ignored. A testament to Houston’s rapid growth, the metro is set to retain its position as a national frontrunner in construction, with an impressive 24,872 apartment units earmarked for completion in the upcoming year. These new deliveries will be predominantly concentrated in the Rosenberg/Richmond, Katy, and Spring/Tomball submarkets. Consequently, a considerable period might be needed apartment operators can push pricing the owners are use to seeing in Houston. However, there’s a silver lining: the constrained availability in the single-family housing sector could bolster demand for Class A apartments.
In the short term, challenges such as these may position Houston’s occupancy and rent growth metrics at the bottom spectrum nationally throughout 2024. Yet, the future looks promising. Post-2024 projections suggest that Houston could align with national averages. Still, it’s crucial to note that, relative to other Sun Belt regions, Houston’s market showcases greater volatility. As such, stakeholders and investors should exercise caution and conduct thorough market analyses before making significant decisions.
Sources:RealPage; BLS; MSCI; The Council for Community And Economic Research (C2ER)