2. Houston
Multifamily fundamentals
Source: JLL Research, Apartment Data Services
Demand
Pricing
Highlights
Vacancy
Q4 2018 Net Absorption: -1,448 units
(down 3,689 units from Q3 2018)
Inventory: 647,941 units
Occupancy: 89.6% (down 40 bps from Q3 2018)
Leverage
Average Asking Rents: $1,022 per unit
(down from $1,030 per unit in Q3 2018)
+ Houston saw more units absorbed than added to the market for the second
year in a row
+ A new construction cycle is gaining momentum with many land sites under
contract for multifamily development
+ Strong job growth is expected in 2019; sustained demand will lead to
increased asking rates in near future
TenantLandlord
3. Houston
Multifamily observations
By year-end, Houston has absorbed more units than it added to
the market
• Having only 6,800 units of new inventory added in 2018 has helped balance the market in a year in which nearly 8,000 units
were absorbed
• Modest absorption totals in 2018 can partially be attributed to apartment tenants moving back into their repaired homes in
the aftermath of Hurricane Harvey
1
Houston multifamily market saw an ongoing boost from
Hurricane Harvey in 2018
• The natural disaster helped increase occupancy, absorption, and asking rents
• Occupancy at year-end stands as 89.6 percent, down 30 basis points from the end of the third quarter, while the average
asking price dipped to $1,022
2
With the heightened demand comes a renewed interest in
construction
• A great deal of land is currently under contract in Houston as both developers and investors are ramping up plans to
capitalize on the growing regional economy and robust multifamily market
• Investor demand has increased for 1990s and 2000s value-add plays
3
Source: JLL Research, Apartment Data Services
4. Houston
Multifamily occupancy
Market-wide occupancy and rents continue to tick upward as sector fully realizes supply
and demand implications one year after Hurricane Harvey
$700
$800
$900
$1,000
$1,100
87%
88%
89%
90%
91%
92%
2013 2014 2015 2016 2017 2018
Occupancy Rents
Source: JLL Research, Apartment Data Services