"We saw unusually strong demand during the fourth quarter, and it was concentrated in the southernmost areas closest to Galveston," comments Greg Willett, M/PF YieldStar's vice president of research & analysis. "We'd called around right after we did our September survey for the third quarter and couldn't find anyone who said there was much impact on multifamily following Ike. But people at that time were likely staying in hotels."
G. Craig LaFollette, executive vice president with CB Richard Ellis' Houston office agrees that Ike did have some impact on absorption. He tells GlobeSt.com, however, that job growth was also a huge determining factor in continued positive absorption.
And the figures vary as much as opinions do. M/PF YieldStar in Carrollton, TX posted a 6,300-unit absorption during the final three months of the year., with an occupancy rate of 92.2%. RealFacts of San Francisco, CA posted a negative 939 units for the final quarter of 2008 and occupancy at close to 91%. The difference in figures can be attributed to the fact that RealFacts counts assets with 100 units and above, bringing the area total to 330,542 units, whereas M/PF YieldStar throws smaller assets into the mix. The M/PF YieldStar total inventory was 501,989 units.
LaFollette and Willett both agree the trend won't continue in 2009. Anticipated job loss, combined with anticipated inventory numbering between 17,000 and 18,000 units will probably dampen absorption while boosting concessions.
"There is a ton of construction going on in Houston," Willett tells GlobeSt.com. "It's number two right now behind Dallas-Fort Worth. Once those come on the market, they'll be hard to absorb."
"In 2009, we'll start to see new projects coming online offering a month free, and we could get back to two months free, all revolving around job growth," LaFollette adds. Though there are local economic generators, such as the Texas Medical Center with about six million square feet under construction, the real determination of jobs, and therefore absorption, in 2009, will be oil.
"It all depends on how long oil stays at $40 a barrel," LaFollette notes. "If it doesn't stay there, 2009 could be a tough year."
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