Demand for multifamily units remains high in Katy area; more growth expected

Image description
Katy Apartment 2019 Real estate
Medical facilities, retail, great schools and economic growth make the Katy area a highly desirable place to live—even for young, single people who cannot afford homes—Apartment Data Services President Bruce McClenny said.

To meet this demand, developers are building multifamily complexes in the area. Since June 2018, four apartment complexes have opened in the Katy area, according to ADS data. Another 15 with about 5,000 units are under construction, and eight more are proposed.

Half of the units under construction will deliver in 2019, and the remaining 2,500 will be delivered sometime in 2020.

However, the market for leasing apartments in the Katy area has nearly reached capacity, and areas allowing multifamily developments are filling up quickly, according to demographic firm Population and Survey Analysts.

“Katy is kind of tapped out,” McClenny said.

The occupancy rate in the Katy area across all apartment types is 89.8% and about 92% when factoring out lease-ups, which are multifamily complexes still under construction.

Many of the multifamily units in Katy were constructed along the I-10 corridor because apartments are typically built in high-density areas with a lot of retail and businesses, PASA demographer Justin Silhavy said.

“We are going to run out of sites along the I-10 corridor,” Silhavy said. “There will be some sites along the Grand Parkway, but not as many.”

Roughly 50% of the new units are single-bedroom floor plans.

“That is typical of any market,” McClenny said. “Single people are moving to Katy, too. They may work in retail or nearby hospitals. That’s where the rental market comes in.”

He added there is a high number of millennials moving to the Katy area who do not make enough money to buy a single-family home, there is a high demand for multifamily units.

Millennials moving to the Katy area are not contributing to the single-family home market dominated by baby boomers, a recent study by the Texas Real Estate Center shows.  Millennials typically have to earn $150,000 to buy a home, but many millennials make as little as one-third of that amount.

“There is a mixture of people coming in from all stages of life,” McClenny said.

Stable economy


The last housing boom in the Katy area was from 2011 until the end of 2014, according to PASA.

Residential developments decreased during the oil price downturn in the Greater Houston area from 2014-16, and ADS data shows a spike in rental price and occupancy in the Katy area in August 2017 when Hurricane Harvey displaced locals from their homes.

After Harvey, rents in the Katy area spiked, and it was difficult for staff at complexes to convince tenants who were fixed at a lower rate prior to the storm to renew their leases, McClenny said.

Although rates were lower from 2018-19 than they were from 2017-18, rent has increased by almost $70 in the last three months.

PASA predicts the energy sector will remain steady and the Katy area will experience a stable economy through 2028.

“The economy is picking back up,” McClenny said, “Katy had the Hurricane Harvey impact over the last two years and also had some of the highest rent rates. I expect a $35—3%—increase by the end of 2019. That’s just keeping up with regular inflation. It’s a normal growth that is reasonable for everybody.”

This article is part of our 2019 Real Estate Edition. View more real estate coverage here.
By Nola Valente
A native Texan, Nola serves as reporter for the Katy edition of Community Impact Newspaper. She studied print journalism at the University of Houston and French at the University of Paris-Sorbonne in France. Nola was previously a foreign correspondent in Jerusalem, Israel covering Middle East news through an internship with an American news outlet.


MOST RECENT

Houston City Hall in rainbow lighting
Greater Houston LGBT Chamber of Commerce celebrates five years of service

The organization is open to all and serves members throughout the Greater Houston area.

Fort Bend County residents will be notified via email, text message or phone call with information about their COVID-19 vaccine appointment. (Courtesy Pexels)
Fort Bend County announces new COVID-19 vaccination system

More Fort Bend County residents than before can now sign up and be placed on a waitlist for a COVID-19 vaccine, thanks to the county's new registration system.

Here are the latest coronavirus updates from Fort Bend County. (Community Impact staff)
Fort Bend County surpasses 50,000 coronavirus cases; testing slowed during winter storm

Fort Bend County Health & Human Services has recorded 1,512 new coronavirus cases since the Feb. 15 winter storm that resulted in days of freezing temperatures and widespread power outages.

The new Fort Bend Epicenter multipurpose facility could be used as a spot for trade shows and sporting events, could act as a large-scale shelter for county residents in an emergency and more. (Community Impact Newspaper staff)
Large multipurpose complex coming to Fort Bend County; Sugar Land to widen University Blvd. and more top Houston-area news

Read the top business and community news from the past week from the Houston area.

Hank's Crab Shack gets and sells several hundred pounds of crawfish daily, especially during the peak of crawfish season. (Morgan Theophil/Community Impact Newspaper)
New Orleans-style restaurant Hank's Crab Shack puts 'a lot of love into the food,' owner said

At Hank’s Crab Shack, it is not uncommon for natives of New Orleans to walk in skeptical and leave with their heads spinning and stomachs full, restaurant owner Akina Robinson said.

Snow covers I-45 in Houston during a winter storm that hit Texas the night of Feb. 14. (Shawn Arrajj/Community Impact Newspaper)
Legislators probe energy officials over power failures, lack of preparation heading into winter storm

The Texas Legislature held hearings Feb. 25 with energy companies including Oncor Electric Delivery and the Electric Reliability Council of Texas in response to last week’s historic winter storm, which left millions of Texans without electricity for days.

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather. (Community Impact staff)
Q&A: Greater Houston Builders Association President Keith Luechtefeld discusses power, plumbing, frozen pipes after Winter Storm Uri

Keith Luechtefeld spoke with Community Impact Newspaper about some of the short-term and long-term repercussions of the storm as well as some of the reasons why so many homes saw burst pipes during the freezing weather.

After the Feb. 20 fire, the building was declared a total loss. (Courtesy Jason Carlisle)
Midway BBQ management looks to future after destructive fire

After the Feb. 20 fire, the building was declared a total loss.

Winter Storm Uri led to closures across the Greater Houston area during the third week of February. (Courtesy Metropolitan Transit Authority of Harris County)
‘It’s been a rough year for us’: Expert explains economic effects of winter storm, ongoing pandemic in Houston region

“It's been a rough year for us economically; it's been a rough year for us public health wise. It's just been a rough year for us psychologically—first the coronavirus and then the freeze," said Patrick Jankowski, senior vice president of research with the Greater Houston Partnership.

Katy city officials plan to rebuild the bridge over Cane Island Creek along the First Street extension for drainage purposes as part of a project to increase mobility in the area. (Morgan Theophil/Community Impact Newspaper)
Upcoming Katy transportation projects focus on increasing mobility to match continued growth

Katy city officials plan to rebuild the bridge over Cane Island Creek along the First Street extension for drainage purposes as part of a project to increase mobility in the area.