The Houston multifamily market saw modest absorption in 2018, with 6,800 new units added compared to nearly 8,000 units absorbed. Occupancy dipped slightly to 89.6% by the end of the fourth quarter due to apartment tenants returning to repaired homes after Hurricane Harvey. With continued job and economic growth expected, demand is sustaining and new construction is gaining momentum as developers seek to capitalize on the market with many land sites under contract.

1. Multifamily
overview

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

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accuracy thereof.
Thank you
Eli Gilbert
Research Director, JLL Houston
eli.gilbert@am.jll.com
Rachel Alexander
Research Manager, JLL Houston
rachel.alexander@am.jll.com
Reid Watler
Senior Research Analyst, JLL Houston
reid.watler@am.jll.com
Roman Rodriguez
Senior Research Analyst, JLL Houston
roman.rodriguez@am.jll.com