The aftermath of Harvey didn’t have the negative effect on the Houston apartment market last year that some analysts feared.
After the storm hit Greater Houston, apartment occupancy got a big boost from the many homeowners who needed a place to stay after their homes were flooded.
Since then, the occupancy rate has consistently stayed above 89 percent, according to research from ApartmentData.com.
ApartmentData.com president Bruce McClenny finds that high number surprising. “I was thinking that more and more people would just move back into their homes,” he said. “But it seems like that there were probably more people [who] decided to be renters for longer this time around.”
Other, more measurable factors are strong population and job growth, which historically lead to higher apartment absorption.
In addition, last year only about 5,000 units were added to the market – compared to more than 55,000 from 2015 to 2017 – which brings supply more in line with demand.
The oil boom that ended in 2014 had led to an oversupply of new apartment buildings, which pushed rental rates down and caused many landlords to offer concessions, such as a rent-free first month or even free cruises.
For 2019, McClenny expects the occupancy rate to continue to be strong and for rents to grow faster.
With just 1.1 percent rental growth in 2018, Houston is still on the lower end among similar sized cities in Texas and the rest of the country.