Houston Multifamily Report – March 2023

Deceleration comes after two very strong years for transactions.

Houston rent evolution, click to enlarge

Houston rent evolution, click to enlarge

On the heels of two robust years, Houston’s multifamily market slowed down to more sustainable levels. Rent gains marked the third-consecutive month of stagnation in January, which is typical for the slower winter season. On a year-over-year basis, rates grew by 4.1 percent, to an average of $1,327, while U.S. figures improved by 5.5 percent, to $1,701.

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Houston sales volume and number of properties sold, click to enlarge

Houston sales volume and number of properties sold, click to enlarge

Despite being on a decelerating path, unemployment in the Bayou City remained the highest among major metros in the state. As of December, the rate was 3.9 percent, according to preliminary data from the Bureau of Labor Statistics. The job market expanded by 6.2 percent, or 176,300 jobs, in the 12 months ending in November, with leisure and hospitality, along with professional and business services, leading gains. This year is expected to be a solid one for job growth. The first building at Helix Park, Texas Medical Center’s 37-acre life sciences campus, is slated for completion later in 2023. Meanwhile, the construction sector could benefit significantly from the $35 billion in public infrastructure funding approved by Texas voters in the November 2022 elections.

Houston. Photo by Larry Gibson/iStockphoto.com

Houston. Photo by Larry Gibson/iStockphoto.com

More than $9.7 billion in multifamily properties traded last year in Houston, and developers completed 17,676 units—most of them in luxury assets. Developers and owners in catastrophe-exposed areas such as Houston and other Gulf Coast metros, will face rising insurance costs and increasing expenses for climate-related renovations.

Read the full Yardi Matrix report.

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