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Houston Apartments Still Down Despite Gain Movement

The market for Houston apartments continues to be weak, even though job gains are picking up slightly.

Friday, October 21, 2016

Houston employers are starting to add more jobs outside of the energy industry, but it has yet to affect the market for Houston apartments.

Even though 19,600 Houston-area jobs were created in the 12 months ending in August, annual effective rent growth continued to slide, reaching -3.1% in September.

“Job gains may be picking up month-over-month, but they are nowhere near what they were even a year ago,” said Stephanie McCleskey, vice president of research for Axiometrics. “We see the diminished demand not only in the negative rent growth, but in occupancy rates, which were the lowest they’ve been since April 2012.”

Houston-The Woodlands-Sugar Land Metropolitan Statistical Area (MSA)

In researching Houston as compared to the national market, Axiometrics reported data as follows:

The rolling two-year data for Houston shows the steep decline in rent growth since early 2015, as well as volatile occupancy since early this year.

Houston Submarket Report

Of the 25 Houston submarkets with more than 1,000 units, the following areas comprise the top five for annual effective rent growth in September 2016. Of note: 13 submarkets had negative rent growth in September. The urban-core Montrose/River Oaks submarket, where the bulk of the new supply is going, had rent growth of -8.1% in September.

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