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The occupancy rate for Houston-area apartments turned higher in February after falling each month since August, when it was just above 90 percent, new data show.
“Winter months are typically slow and then all of a sudden things pick back up in February again,” said Bruce McClenny, president of Houston-based ApartmentData.com. Rental activity should continue to pick up through summer before the school year starts.
The vacancy rate for Houston-area apartments was 89.7 percent in February, slightly higher than the previous month, according to the data firm. The average rent for an 882-square-foot unit was essentially flat at $1,024.
McClenny said the market as a whole has stabilized, after years of fluctuations driven by the oil bust and then Hurricane Harvey. Yet there are still areas of concern.
“The A Class is still having some issues,” he said. “The downtown area has a lot of high-rises trying to lease up. We’re still seeing some discounting and concessions there.”
The Energy Corridor, too, has more supply than it should as properties that flooded during the hurricane are open for leasing again.
Still, developers are feeling emboldened to start new projects.
Some 18,000 units are under construction, about double the tally of a year ago. The number of proposed units is nearly 27,000, compared with 16,000 a year ago.
“All these numbers have jumped and put us back into another development cycle,” McClenny said.
The increased activity is something to watch, but it’s not concerning – at this point.
If Houston can add between 60,000 and 70,000 jobs annually and apartment deliveries stay in the 12,000 to 15,000 range, the market should remain healthy, he said.
“Back in 2016 we had 21,000 units delivered and 4,000 absorbed. That’s what built our problems,” he said. “Now we’re on a different operating plane.”