Houston 1Q23 Multifamily Market Insights: Economy still in growth mode, developers active
Highlights:
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- Property fundamentals in the Houston multifamily market lost some traction during the first quarter, as asking rents dipped and the vacancy rate increased. Multifamily development trends are mixed, with deliveries picking up while starts slowed.
- Vacancy in Houston rose 50 basis points for the second consecutive quarter. The rate reached 6.4% in the first quarter and is up 70 basis points from one year ago.
- After posting significant gains for two straight years, asking rents fell 0.7% during the first quarter to $1,258 per month. Despite the recent dip, area rents advanced by 4.1% year over year.
- Sales activity in the Houston multifamily market continued to slow during the first quarter, falling roughly 40% from levels at the end of last year. In transactions where pricing was available, the median price was $163,000 per unit, while cap rates averaged 5.25%.
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