September 2009

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Houston area multi-family occupancy continued to decline during the month of September, marking the twelfth straight month of declines for the market area.  A bright spot in the markets were the continued rise in rental rates as well as a trend of increasing occupancy among Class A properties, as the group gained 0.15 percentage points over the month and is up 1.04% over the past four months, with current occupancy at 89.15%.  As the under-construction pipeline remains elevated, continued declines in occupancy are forecast for the marketplace as new product is delivered to the operating supply.

Houston apartment market occupancy decreased 0.34 points in September to 86.75%.  Occupancy is down 2.47 points over the last year.  Average rents per square foot increased to $0.878 psf, and are up $0.015 psf since September 2008.  Average rent per unit gained $0.46 in September to $754.11, which represents an annual increase of $15.81.  Monthly absorption totaled a negative 1,392 units, while annual absorption (rolling twelve months) was a negative 1,009 units.

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