February 2010

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After enduring a continual decline over the past 16 months, overall occupancy in the Houston area multifamily sector finally saw an increase during February. This rise can be attributed to the positive absorption posted during the month (the highest since March 2009), accompanied by a 0.46 point increase in occupancy among Class A properties (88.31%). Rental rates, however, did not perform as well over the course of the month, both on per unit and per square foot basis. This was most evident among Class A properties as their monthly declines lead all classes with per unit and per square foot decreases of $12.07 and $0.012, respectively. Without a significant amount of immediate deliveries expected from the construction pipeline, expect a similar outcome next month for the overall market.

Houston apartment market occupancy increased 0.13 points in February to 85.54%. Occupancy is down 2.57 points over the last year. Average rents per square foot decreased by $0.004 per square foot, but are up $0.010 per square foot since February 2009.  Average rent per unit decreased $3.73 in February to $757.76, which represents an annual increase of $12.08. Monthly absorption was positive 1,396 units, while annual absorption (rolling twelve months) totals negative 1,492 units.

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