November data from MRI ApartmentData, a software company offering insights on multifamily housing, shows the number of multifamily units under construction in the Conroe, Montgomery and Willis areas has increased from around 1,000 in 2021 to approximately 4,000 new units planned or currently being built in 2023.
Scott Harper, president of the Conroe/Lake Conroe Chamber of Commerce, said he believes multifamily properties in Conroe hold appeal due to their convenient proximity to I-45, drawing in individuals keen on surveying the area before settling down.
“There’s a trend of people instead of coming and buying a home,” Harper said. “They come to a new area, find these nice apartments and secure a year’s lease to explore and get a pulse of where they want to be when they do settle down.”
The context
Since mid-2022, six multifamily complexes have opened in the area: The Strake at Grand Central, Alta Sergeant, Prose In The Pines, The Flats at Hooper Hill and Argo Pointe Apartments in Conroe; and The Vic at Woodforest off Central Pine Street in Montgomery.
In addition, there are around 10 multifamily projects under construction in Conroe, Montgomery and Willis with three more proposed, according to MRI ApartmentData and Community Impact reporting.
Two developments slated for Montgomery include 98 multifamily units proposed as part of a larger mixed-use project at Lone Star Parkway and FM 149 by Superior Properties, according to previous reporting, and Grand Monarch Apartments, which are under construction as of an October 2023 development map from the city.
Two new construction projects were also registered in Willis with the Texas Department of Licensing and Regulation on Nov. 20—Cannan Place Apartments and Camp Creek Apartments.
“Conroe has become a hot commodity for investors compared to its previous status,” Harper said. “Ownership groups specializing in apartment complexes and townhomes carefully analyze demographics and track industry trends.”
Regionally, as of an October report by economic development organization the Greater Houston Partnership, there are 23,638 units across 91 properties under construction in the Greater Houston area, with 19,730 units expected to be completed within the next year.
Ariana Brewer, the resident manager at Argo Pointe Apartments, a complex with 60 units that opened in September off Argo Road, said Conroe was chosen as it’s an emerging city.
“This location perfectly fits the area’s growth and vibe,” Brewer said. “It’s well-positioned, part of a small boutique community and quiet at [FM] 1314.”
The breakdown
According to MRI ApartmentData, Conroe, Montgomery and Willis total multifamily occupancy rates have fluctuated, dropping from 89.6% in October 2022 to 85.4% in October 2023.
This is lower than the multifamily occupancy rate for the Greater Houston area of 89.2% as of September—a decrease from 90.8% in September 2022, according to MRI ApartmentData.
In Conroe, Montgomery and Willis, around 1,600 units were added since 2021, according to MRI ApartmentData.
As occupancies remain above 85%, rents in Conroe, Montgomery and Willis remain high.
“When occupancies drop below 90%, that’s when it becomes a renter’s market. Rents tend to be more favorable for renters at that point,” said Bruce McClenny, industry principal with MRI ApartmentData. “Operators can’t easily raise rents because the supply exceeds demand.”The big picture
In Conroe, a boom in retail and lower-paying jobs has spurred a need for multifamily housing for those seeking affordability, Harper said.
According to the Bureau of Labor Statistics, Montgomery County saw leisure and hospitality jobs up 22.36% from March 2018 to March 2023.
MRI ApartmentData shows the effective rental price—the total cost of renting minus any discounts—in the Conroe and Montgomery area has been on the rise.
As well, 2022 American Community Survey five-year estimates show renters pay more for median monthly housing costs in five local ZIP codes than homeowners do.Going forward
Development activity indicates around 1,400 units will be added locally among seven complexes slated to open in 2024.
“As we open the doors to Alta Sergeant, we are happy to be a part of one of the fastest-growing markets in the Houston area,” Bart Barrett—managing director of Wood Partners, developer of Alta Sergeant, which opened in November in Conroe—said in a Nov. 28 news release.
However, the apartment market may be in an overbuilding phase, leading to a flattening of apartment rents while housing prices continue to rise, said Patrick Jankowski, senior vice president of research at the Greater Houston Partnership, in an Oct. 31 GHP podcast.
“We’ve seen apartment rents flatten, while housing prices go up,” Jankowski said. “It definitely means we’re going to see more renters—not just apartments, but also single-family homes.”•
