Another seven complexes are expected to open with 2,073 units by October 2021, and six more multifamily developments with 1,799 units are proposed for the Katy area, per the data.
“[In the Katy area] a lot of new product is being built, and it’s usually higher quality,” ApartmentData.com President Bruce McClenny said. Out of about 22,500 total units in the Katy area—defined as the geographic boundaries of Katy ISD—roughly 14,000 are Class A apartments, which were built after 2004 with rents around $1,200 to $1,400 per month, McClenny said.
There are fewer Class B apartments—which are apartments built in the 1990s and 2000s with monthly rents ranging from $900-$1,100—in the Katy area, he said. There are only about 2,000 units are considered Class C, and there are no Class D apartments in the Katy area.
Across the Greater Houston area, demand for apartments has slumped because of the economic slowdown from the coronavirus pandemic and oil crash this spring, he said.
In the Katy, Cinco Ranch and Waterside submarket, rents are slipping, but it had the highest absorption—or the net number of move-ins and move-outs—out of the ApartmentData.com’s 42 submarkets between March and June.
“Katy has the best demand of all areas of [the Houston] metro,” McClenny said. “Most times when we look at Katy, it has a lot of demand—it justified the number of units delivered,” he said. Construction activity may slow in Katy and the Greater Houston area, he said. Local permitting offices were closed during the stay-at-home orders, so there will be a temporary pause on all new construction as these offices catch up. Some developers may pause on their projects to wait and see the economic fallout and demand over the next few months.
McClenny said he is optimistic this will be temporary slowdown, and the Katy multifamily market will rebound.
“Katy’s a great place to live: It’s proven that over and over again,” he said. "It’s a very desired place to live, and development has been rewarded. That dynamic may pause but should get back to its position.”
