Local Multifamily Rental Market Benefits

HOUSTON-”The local apartment market is enjoying the direct benefits of strong job creation and restrained new development,” says a report on the Houston apartment market published by Hendricks & Partners. The report notes that by the end of September, employment growth was a strong 2.3% for 2001, creating approximately 49,000 jobs.

The effects of last week’s layoffs by Enron will not likely be assessed in this or other reports until the end of the year.

For the third quarter of 2001, however, the report notes “vacancy rates are continuing to fall as rents make stronger gains across the Houston apartment market.” The third quarter overall average vacancy rate decreased to 7.5% from the 9.5% measured at the same time last year. The report contends that, “newer, more upscale properties are posting the strongest reductions in their vacancy rates, benefiting the most from the deceleration in new construction.”

The Hendricks & Partners report attributes stronger rent growth to these new luxury units as well. The end of the third quarter saw an average rent increase of 6.4%, up from the 2.8% gain posted one year ago. The report puts the average market rent at $602 per unit compared to last year’s $566 per unit.