Dallas/Fort Worth Multifamily Market Gains Ground

Greg Willet, vice president of research products for M/PF Research Inc. in Carrollton, tells GlobeSt.com that first quarter numbers "suggest 2004 is going to be a big year for demand." The home-buying move-outs of last year's fourth quarter apparently have tapered, allowing the year to kick off on a strong note. Historically, second and third quarters are big gainers so the upcoming months were sure to be stronger, but the solid show of demand, 5,380 units in Q1, is the best sign yet that the recovery has taken root.

Admittedly, there's still lots of ground to be regained since the region's occupancy "is still incredibly low," Willett says of the 89.8% average, up just a shade from the Q4 2003 and down just a tad from a year ago. His research shows Las Colinas and Intown Dallas are nearly full, but the dynamics behind the high occupancies are vastly different. Intown's 93.7% occupancy came without rent cuts unlike Las Colinas where property owners slashed rents about 2.5% to register a 94% occupancy, Willett says. The high occupancies, though, will change before the year ends since there are "projects about to jump out of the pipeline," he adds. Still, the gains can't be lightly dismissed. "It's encouraging to see a couple neighborhoods showing significant momentum," he asserts.

The Dallas/Fort Worth median rent is $679 per month, down 1.8% from fourth quarter 2003 and 3.6% below last year's first quarter tally. The good news, Willett says, is "we cut the annual pace of rent loss by about half just in the first quarter."

The multifamily sector, like its counterparts, needs jobs to be created before there is any significant uptick in the numbers. Research shows 12,119 apartments are under construction in the metroplex although not all will deliver this year. Still, the number has edged above the norm of recent years. "They are counting on things improving quickly," Willett says.