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Apartment occupancy in Houston peaked in the fall of ’21 and has trended down since. From September ’21 through November ’21, average occupancy held steady at 91.6 percent. It began to drop in December ’21 and by December ’22 occupied units stood at 90.6 percent. The market is considered landlord-friendly whenever occupancy tops 90.0 percent and tenant-friendly when it slips below that level.
Rents fell on average 0.7 percent in the first year of the pandemic. They surged nearly 14.0 percent in ’21. The recent drop in occupancy has weighed on rates, however, with monthly rents rising only 5.8 percent in ’22. The average peaked at $1,263 in August ’22 and slipped to $1,250 in December. Rates will likely slide even more in ’23.
Absorption, the counterpart to occupancy, has dropped to the weakest level in recent memory. Class B and C absorption turned negative in January ’22. Absorption of Class A units softened in the late summer and remained marginally positive through the end of the year.
As of early January ’23, there were 20,724 units under construction and another 33,991 proposed.
Prepared by Greater Houston Partnership Research Department
Patrick Jankowski, CERP
Senior Vice President, Research
December '22 occupancy rate stood at 90.6 percent
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