Those trends can be seen in the Heights, River Oaks and Montrose areas, according to survey data from ApartmentData.com.
Between February and May, average monthly rent prices rose three local submarkets tracked by the agency—3.3% in Highland Village/Upper Kirby/West U, 3.7% in Texas Medical Center/Brays Bayou and 2.3% in Heights/Washington Avenue. That compares to an average rent price increase of 2.7% across the Greater Houston area over that time.
However, the rate at which rents have been increasing so far in 2022 has been slower than the pace seen in 2021, ApartmentData.com President Bruce McClenny said. For example, although rents in the Heights submarket jumped from $1,472 in February 2021 to $1,752 in November of that year, they have increased to $1,804 since then.
“We all knew this was going to slow down, temper itself back to more normal times,” McClenny said.
McClenny said the Houston metro area is still more affordable than Dallas and Austin. Houston’s average rent hit $1,233 in May, which compares to $1,475 in Dallas and $1,648 in Austin. San Antonio has the cheapest average rent of the four cities at $1,193, according to ApartmentData.com.
“That’s, in a relative sense, more positive for people that live here and want to live here,” McClenny said.
Moving forward, McClenny said prices are likely to continue to rise. If rental rates were to drop, it likely would not be for desirable reasons, he said, giving job losses as an example.
McClenny said Texas generally does a good job of adding apartment supply, but it still is not adding supply fast enough to bring rents down.
“I don’t think it could add supply fast enough to make a difference this year and next,” he said.
Moving forward, McClenny said the rent and occupancy trends of the previous six months are generally a good predictor of what the next six months might bring. He said the market will probably settle down to some degree in 2023.