The outgoing director of the University of Houston Institute for Regional Forecasting delivered a thumbnail sketch on the state of the apartment industry to apartment owners, investors and operators in Houston.Î¾ The decade began with record-low vacancy rates, and Barton Smith says that led a period of over-building.
"Low vacancy rates stimulates a lot of new supply and the builders got a little bit carried away.Î¾ They got carried away when we get the tech stock collapse and the recession nationwide.Î¾ And then it finally hit home in Houston post-911 and then the Enron/Calpine/so forth, debacle.Î¾ We didn't go into a major recession in Houston at the first part of the decade, but we went into a stall mode at the same time that we were building an awful lot of new apartment complexes."
Innovative mortgage schemes in the 90s and recent low-interest mortgage rates and tax credits contributed to a healthy move to home ownership.
"We were able to qualify people for owner-occupied housing in Houston that would never otherwise have been qualified.Î¾ Our best estimate is that we qualified somewhere between 100,000 and 150,000 that under normal circumstances wouldn't have been capable of buying owner-occupied housing.Î¾ We actually have a couple years in which total occupancy in the apartment markets fell.Î¾ Even though Houston was growing, the single-family market was stealing all of these households from the apartment market."
The Houston Apartment Association hosted its annual Education Conference and Expo at Reliant Center.