July 2009

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Houston area multi-family occupancy continued to decline during the month of July, a familiar trend given the high level of under-construction properties for the sector.  However, strong absorption figures on both a monthly and annual basis continue to foretell of a return to stable metrics as the construction pipeline diminishes.  While average area rents continue to increase on a per unit basis, (mainly due to the increasing percentage of Class A communities in the market) rents for Class A properties appear to have peaked as monthly declines in per unit (-$0.09, $1,102.44) and per square foot averages (-$0.001, $1.64) are becoming the norm.

Houston apartment market occupancy decreased 0.07 points in July to 87.33%.  Occupancy is down 1.61 points over the last year.  Average rents per square foot held steady at $0.875 psf, and are up $0.014 psf since July 2008.  Average rent per unit gained $0.16 in July to $751.55, which represents an annual increase of $16.91.  Monthly absorption totaled 581 units, while annual absorption (rolling twelve months) was a positive 3,460 units.

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