November 2009

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November witnessed continued declines in the Houston area multi-family sector, as the month marked the fourteenth consecutive for declining occupancy, while rents on both a per unit and per square foot basis fell over the previous period.  During the fourteen month slide, occupancy has declined approximately 3.5%, a trend that is sure to continue given the elevated under construction supply remaining.  Additionally, while the declining rental rates for the month are surely not a trend, the lack of deliveries during November highlighted the impact of new Class A properties and concessions on elevating average market rents, as November’s dip was the first in over 30 months.

Houston apartment market occupancy decreased 0.37 points in November to 85.83%.  Occupancy is down 3.20 points over the last year.  Average rents per square foot decreased to $0.880 psf, but are up $0.012 psf since November 2008.  Average rent per unit decreased $0.86 in November to $756.94, which however represents an annual increase of $14.22.  Monthly absorption totaled a negative 1,270 units, while annual absorption (rolling twelve months) was a negative 4,109 units.

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