By Liviu Oltean, Associate Editor
Houston’s multifamily market is heading in the right direction, according to a recent market report from Marcus & Millichap. On account of Houston’s 2014 performance, the multifamily market is ready to experience another year of strong economic growth as a significant rise in deliveries will finally be able to meet renter demand.
While there is some uncertainty regarding Houston due to the recent drop of oil prices, the report is optimistic: the city’s diversified employment base and adaptability will most likely maintain job creation. As such, Houston is expected to remain among the best metros for job growth in 2015, with an estimated growth of 3.1 percent.
About 15,000 new rentals will be delivered in 2015, which accounts for a 2.4 percent increase over last year’s apartment inventory. While vacancy is expected to also rise by 10 basis points, the vacancy rate of 5.5 percent is still well below the historical norm, according to the same source.
While several important deliveries are expected in Houston, investors and owners are also aware that various office developments are filling up, which will drive renter demand even higher. Overall, these factors will create leverage for strong rent growth.
Chart courtesy of Marcus & Millichap