Six months in, Houston-area apartment rents still feeling COVID-19 squeeze

Multifamily housing construction brought almost 22,000 units to market in the past 12 months, six months of which were amid the coronavirus outbreak. (Matt Dulin/Community Impact Newspaper)
Multifamily housing construction brought almost 22,000 units to market in the past 12 months, six months of which were amid the coronavirus outbreak. (Matt Dulin/Community Impact Newspaper)

Multifamily housing construction brought almost 22,000 units to market in the past 12 months, six months of which were amid the coronavirus outbreak. (Matt Dulin/Community Impact Newspaper)

In the six months since beginning of the coronavirus pandemic in Houston, the region's apartments have lost all of their average rent gains from the past 12 months, according to new reports by a multifamily housing analytics firm.

Made with Flourish

Unlike the single-family home market, which has had three months of strong sales growth and declining inventory, Houston apartments remain in a weakened position, due in large part to overall uncertainty in the job market and a surge of new construction adding supply, said Bruce McClenny, president of ApartmentData.com.

"Real estate markets really depend upon job growth to grow," he said.

Overall average rent dropped by $5 in August, bringing the overall average across all units to $1,044, its lowest level since May 2019. That means the market is starting from a low position as it heads into a what is usually a sluggish fall and winter, McClenny said.


The drops are even more precipitous for high-end Class A properties, where the average rent for August was $1,463, its lowest in over two years. Occupancy rates are down to around 80% for Class A, as compared to around 90% for the market overall, partly because so many new units have become available.

"We have so much new product, you know—we delivered 20,000-22,000 units in the last 12 months, and the timing of that just couldn't be worse," McClenny said.

Sharp rent declines were found in the Inner Loop areas, particularly downtown.

Absorption, the difference between the number of move-ins and move-outs, is showing positive signs overall, but among Class C and D properties, which typically serve as workforce housing, it has been in negative territory several times since March, suggesting a greater trend toward move-outs.

Bright spots of growth in the marketplace are in Houston's outlying areas, such as Sugar Land-Missouri City, Lake Houston-Kingwood, and Clear Lake-Webster, all of which are showing increasing rents in the past three months, the data show.
By Matt Dulin
Matt joined Community Impact Newspaper in January 2018 and is the City Editor for Houston's Inner Loop editions.


MOST RECENT

I-69 Southwest Freeway at I-610 West Loop will be closed May 7 at 9 p.m. until May 10 at 5 a.m. (Courtesy Texas Department of Transportation)
TxDOT: I-69 Southwest Freeway at I-610 West Loop closed through weekend

From May 7 at 9 p.m. until May 10 at 5 a.m., the lanes will be closed.

Legacy Community Health is bringing COVID-19 vaccines to historically underserved communities across Beaumont and Houston. (Courtesy Pexels)
Legacy Community Health vaccine rollout targets underserved communities in Houston, Beaumont

The health network is partnering with other entities, including Beaumont Independent School District.

HTV
Houston, Harris County annual addresses no longer hosted by Greater Houston Partnership over Texas voter bill dispute

Local leaders criticized the area chamber of commerce for not taking a definitive stance on two voting access bills currently being deliberated in the Texas Legislature.

The new location is Chipotle's first in Magnolia. (Courtesy Chipotle Mexican Grill)
Chipotle opens in Magnolia; get a sneak peek of new Houston aquarium and more metro news

Read the latest business and community news from the Houston area.

The Original ChopShop is targeting an early September opening in River Oaks, one of the first two locations of the chain coming to Houston. (Courtesy Facebook)
ROUNDUP: 5 summer openings planned in Heights, River Oaks and Montrose areas

A crafthouse, a massage therapy spa and a corner store that doubles as a Mediterranean cafe are among the new businesses that hope to open this summer.

The business specializes in customized in-home consultations during which families will receive a fire safety plan specific to their house's floor plan and an age-appropriate, individualized plan for each family member. (Courtesy Fire Smart, LLC)
Fire Smart, LLC celebrates one year of providing fire safety education across Greater Houston area

The business specializes in customized in-home consultations during which families will receive a fire safety plan specific to their house's floor plan and an age-appropriate, individualized plan for each family member.

Designs show the concept for the administration area of a new 32,000-square-foot campus being planned by Xavier Educational Academy. (Courtesy Xavier Educational Academy)
Xavier Educational Academy announces plans to combine campuses at 1 location near Arboretum

The private school currently operates at three campuses in West University, The Woodlands and Memorial. The new 32,000-square-foot campus will quadruple the available space.

kiosk downtown
Updated: In close vote, digital kiosk proposal gets approval from Houston City Council

The potential contract between Ohio-based company IKE Smart City and the city of Houston would allow the media company to sell advertising space on dozens of 8-foot-tall digital kiosks while paying the city a portion of its commissions.

The annual Puppies for Breakfast event offers dog lovers an opportunity to bring their pet to an outdoor party with local vendors and food trucks. (Courtesy Puppies for Breakfast)
10 events and things to do in the Heights, Montrose and River Oaks areas this May

A number of events are being hosted in May, including a Mother's Day mercantile market, bicycle scavenger hunt and the "Art Car Experience."

More than ever, Harris County home appraisals draw protests

Will you be protesting your home values this year?

With more than 400 locations across 11 states, the Oregon-based drive-thru coffee company serves specialty coffee, smoothies, freezes, teas, a private-label Dutch Bros Blue Rebel energy drink and nitrogen-infused cold brew coffee. (Courtesy Dutch Bros Coffee)
Dutch Bros Coffee coming to Spring; Tha Roux Seafood opens in Katy and more Houston-area news

Read the latest business and community news from the Houston area.

The National Weather Service issued a flash flood watch for all of Houston the morning of April 30, which will be in effect through the morning of May 2. (Courtesy Adobe Stock)
HISD cancels food distribution events May 1 due to inclement weather

The National Weather Service issued a flash flood watch for all of Houston through the morning of Sunday, May 2.