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Houston Multifamily Housing Market

August 2, 2007

Houston Multifamily Housing Market

FOR IMMEDIATE RELEASE

Contact:
Kathryn Koepke
Manager, Market Research
koepke@poconnor.com
713-375-4239

Scott Sherrill
Director of Marketing 
ssherrill@poconnor.com
713-375-4264 

Houston, TX (August 2, 2007) - In the Houston area, the apartment market saw impressive growth in occupancy due to the increase in foreclosures as a result of the sub-prime lending fallout. The foreclosures forced many homeowners to relocate back to multifamily housing. In particular, Classes A and C properties saw the greatest increase in occupancy in the Houston metropolitan area.

This is according to the second-quarter Houston Apartment Market Update report by O'Connor & Associates, the Houston-based real estate consulting firm and leader in apartment market research data in Texas. The report tracks the growth of apartment living in the Houston metropolitan area.

Houston area apartment occupancy fell for the fifth consecutive quarter, down 0.04 points overall and down 2.59 points for the year. On average, apartments in Houston show an 88.49 percent occupancy rate. Class A properties gained 0.22 points to 91.02 percent; Class B fell 0.31 points to 89.27 percent; Class C reported the biggest quarterly gain of 0.18 points to 85.82 percent and Class D fell 0.05 points to 84.79 percent. The highest occupancy level was again in River Oaks at 95.27 percent. Richmond/Rosenberg had the lowest occupancy rate at 79.56 percent.

The market absorbed a robust 2,560 units over the second quarter of 2007, with Classes A, B and C properties posting positive figures. The Class A market fared the best over the second quarter, absorbing 1,849 units. The Class B market posted positive numbers for the second straight quarter, absorbing 122 units. Absorption in the Class C market was at 603 units, while Class D was the only class to show a negative quarterly absorption with –14 units. The Pasadena submarket posted the highest absorption with 303 units. The areas experiencing the most move-outs were the Inner Loop West and Sharpstown/Westwood areas.

Rental rates increased again in the second quarter. On average, apartment rent is $0.841 per square foot (psf), up $0.015 psf. Class A posted the largest increase in rental rates, up $0.008 to $1.115 psf. Class B rents rose another $0.002 psf to $0.816 psf. Class C rental rates rose $0.001 psf to $0.692 psf. Class D properties increased $0.006 psf to $0.604 psf. The highest overall rates by submarket were found in the Downtown area at $2.002 psf. The lowest rents were in Sharpstown/Westwood at $0.679 psf.

Houston has a total of 2,577 operating or under-construction projects greater than 25 units with a total of 530,402 units. Class A properties make up 21 percent, Class B make up 42 percent, Class C make up 31 percent and Class D make up six percent.

For a complete report on the Houston apartment market, visit http://www.poconnor.com/apartment_market_update/houston_2Q_2007.html.  The report measures demand (absorption), occupancy, rates and apartment inventory.

Houston Apartment Market at a Glance

 

Class A

Class B

Class C

Class D

Overall

Qtr

Yr

Occupancy

91.02%

89.27%

85.82%

84.79%

88.51%

v

v

Rent/Unit

$1,054

$662

$560

$525

$718

^

^

Rent/SF

$1.115

$0.816

$0.692

$0.604

$0.841

^

^

Absorption

1,849

122

603

-14

2,560

^

v

About ApartmentLink
ApartmentLink is your best source for apartment market data in Houston, Dallas/Ft. Worth, Austin and San Antonio. With information on owners, occupancy, rent, ammenities, detailed property information, comparable information, and much more, ApartmentLink provides vital apartment information for on-site managers, vendors, brokers, owners and investors. The database is available online at oconnordata.com.

Ask about your FREE 10-Day trial for the most accurate online Texas apartment data today! Click here to sign up or contact Heather Wiesner at 713-375-4262.

About O'Connor & Associates
O'Connor & Associates, a Texas-based national real estate service firm providing appraisals, market research, cost segregation studies and federal and ad valorem tax reduction services, has been in business since 1974 and has more than 40,000 clients. Patrick O'Connor, MAI, president of O'Connor & Associates since 1983, is frequently acknowledged by national publications as a respected source of information on real estate trends. Visit www.poconnor.com.

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