The volume of Houston apartments to be delivered during 2016 will nearly match job growth tallies for the year. This, along with the fact that developers are more commonly offering two-month concessions for newly delivered projects, suggests Houston's multifamily sector is entering overbuilt status. At the start of February there were 98 multifamily projects underway in the Houston metro totaling 27,941 units, according to data from Bruce McClenny, president of Houston-based Apartment Data Services. Of these units an estimated 18,000 to 20,000 will be delivered this year, depending on project delays related to manpower and availability of building materials. McClenny estimates that only half of these units, roughly 10,000, will be absorbed, which will drive the metro's overall multifamily occupancy rate down to an estimated 89.3 percent by year's end. Developer rule of thumb typically says that from the creation of five or six jobs, the demand for one apartment unit is bo...
- The oversupply is concentrated within four regions.
- Two-month concessions are already becoming commonplace.
- Houston's eastside (Baytown) and southwest (around Sugar Land) won't be as affected by multifamily deliveries.
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