Dallas-Fort Worth's multifamily sector has been one of the markets hardest hit by high supply after a population surge since the pandemic. However, a report from Colliers analyzing the city's asset class suggests that things might be starting to stabilize now.
Occupancy improved 20 basis points from the previous three months to 93.5 percent in the first quarter. And year-over-year, the category was up by 90 basis points.
That came as supply has continued to fall dramatically.
"Year-to-date deliveries reached 43,099 units. Declining construction activity allowed existing inventory to be absorbed more effectively, keeping pace with ongoing job growth and steady in-migration," Colliers said.
However, not everything is trending in the right direction. For example, net absorption is down more than 4,000 units to 10,189 quarter-over-quarter, while the category is up by about 4,000 year-over-year.
Most notably, average monthly rents are only $1,486, down from $1,518 in the 12 months prior and $4 lower than in the fourth quarter. On the bright side, this category appears poised for recovery. Colliers expects rents to average $1,519 in the first quarter of 2026.
Occupancy is expected to drop, but by only 20 basis points in the first three months of next year, which may indicate that the category has stabilized. Meanwhile, Colliers anticipates that new supply will more than triple to 29,848 compared with this year's three-month period.
"These developments suggest that Dallas and Fort Worth are entering a period of increased market balance, supported by stronger occupancy and a slowdown in new supply," Colliers wrote in summing up the first quarter performance.
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