For the most part, Houston's multifamily sector is looking like a fight to quality at the moment, based on a mixed second-quarter market report from Colliers.
This is especially the case for net absorption, which, although decreased by 34.3 percent year-over-year, rose 38.6 percent from the previous three months to 5,521 units. Of the second-quarter demand, 79.4 percent came from Class A product.
Occupancy improved 70 basis points from 12 months prior to 89 percent. Class A product over that span showed a strong improvement, going from 81.4 percent to 84.7 percent.
Additionally, Class A rents were the only multifamily product type to show growth quarter-over-quarter, up 0.5 percent to $1,744, although the segment was down 0.9 percent from a year prior. Overall, rents averaged $1,277, which is up $1 from the previous three months, but down $2 year-over-year.
On a rolling basis, sales dropped to $3.5 billion, down by $700 million from the second quarter of 2024.
The top multifamily sale by number of units that Colliers brokered in Houston involved an unnamed 974-unit portfolio. The next largest involved 252-unit Green Arbor Apartments, followed by 188-unit Bay House.
Another important development was supply slowing considerably. Deliveries were just 2,275 units compared with 7,757 in the 12 months prior. Also, construction was halved at 9,024 units.
"Construction activity and overall absorption remain concentrated in the Northwest submarket with 3,599 units currently underway and 2,586 units absorbed during the quarter," Colliers said.
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