Occupancy rates across the Greater Houston area fell to 90.7% in October, down from 91% in September. Occupancy rates have been steadily declining in Houston since April, when they were at 91.7%.
Meanwhile, rental rates in the city dropped slightly in October to $1,254 per month, down from $1,261 per month in September. Rental rates have been increasing, at times rapidly, since around early 2021 and are still up by about 8% year over year, according to ApartmentData.com.
The strongest submarkets in Houston—measured by ApartmentData.com based on a combination of rental rate growth and absorption over the past three months—include the Alemda/South Main area, Sharpstown/Westwood and Memorial/Spring Branch.
However, drops in effective rents and occupancy rates have been noted in some Inner Loop submarkets, including Heights/Washington and Texas Medical Center/Braes Bayou.
The effective rental price in the Texas Medical Center/Brays Bayou submarket fell to $1,439 in October, down from a recent high of $1,512 in July, but up from last year at this time, when rents clocked in at $1,410 on average. Occupancy rates fell to 90.4% in the submarket, the lowest mark since March 2021's 90.1%.
The Heights/Washington submarket saw rents fall to $1,798 per month on average in October, down from $1,828 per month in July. Occupancy rates were slightly lower than the city's average at 88.8%, but the submarket has also seen just under 2,000 new units open within the past 12 months. Another 867 units are under construction and are slated to open throughout the end of 2022 and through mid-2023.
Houston rents remain well behind the Austin and Dallas areas, where monthly rents were $1,651 and $1,507 on average, respectively, in October.
