Michael Hoffman, regional manager of Marcus & Millichap's Houston office tells GlobeSt.com that what sets the local apartment market apart from others around the US is out-of-state investors have put Houston on their acquisition radar screen.

"Buyers are a dime a dozen," he quips, and Hoffman believes the trend will continue as more institutional buyers realize how easy it is to remotely manage apartment communities in Houston. Also, Hoffman says buyers are attracted to Houston's affordable rates for multifamily product. He calculates nearly six of every 10 deals that come out of his office are with out-of-state buyers.

In addition to the imported capital of out-of-state buyers, the Houston apartment market has remained in check because it has seen a slowdown in construction over the last 12 months. The report asserts "Houston is one of only a few high-growth MSAs that has shown the necessary restraint in apartment construction, keeping supply and demand in balance."

The report additionally predicts that while vacancies, which are now at an overall rate of 7.5%, will continue to decrease by 0.5% to the lowest levels in more than a decade. Also, rent growth will be among the highest in the nation rising over 3%.

"Apartment vacancies have improved and will continue to decrease this year as a slowdown in new construction is met with strengthening economic conditions," stated Hoffman in a prepared statement. "Rent growth remained positive during the first half of 2002 and is expected to gain momentum through the end of the year."