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Houston’s Apartment Rates on the Rise; Mirrors Trend Nationwide

Houston Apartments

If you’ve noticed that rents have been rising lately, it’s not your imagination – rents are going up! Rents in the Houston have risen by Houston isn’t alone.

 

Rents are rising across the country and are doing so, according to a January 5 article on USAToday.com "as the U.S. economy creates more jobs and demand for rental housing grows."

 

Rental rates nationwide rose anywhere from 2.3 to 4.5 percent in 2011 (depending on which research firm one chooses to follow, according to the article)

 

That’s certainly the case in Houston, where developers have started ramping up multi-unit construction – but not in time to ease rental rates. In fact, according to a November 21 Houston Chronicle article

 

The flurry of activity is meaningful after a period where construction was virtually nonexistent. Amid the nation's economic crisis, developers couldn't get loans to start new construction and the appetite for apartments soured as renters moved in with relatives or doubled up in units.

 

But with the local job market beginning to recover, demand has been ramping back up, and the numbers of available units are dwindling. Few are concerned about a glut.

 

"If we ever needed construction, we need it now and need it soon," said Bruce McClenny, president of Apartment Data Services.

 

Most of the units won't be ready until late 2012 at the earliest.

 

As a result, rents are escalating and landlords of upscale Inner Loop properties have stopped offering aggressive concession packages.

 

The Occupancy rate for Houston’s high-end rentals was 93.4 percent, the article continued, an eight (8) percent increase over the same period in 2011. Rental rates averaged $1,237 a month, the highest ever.

 

"Blame it" on job growth.

 

The article says a new apartment is needed for every six to seven new jobs created. The article also quotes an economist who said that about 62,000 jobs should be created in Houston in 2012. Doing the math, that would mean a need of 10,333 apartments (at six jobs) or 8,857 apartments (at seven jobs).

 

So, since there won't be 10,000 (or even 8,000) apartments constructed this year, apartment rentals could be a premium commodity.

 

The trend for apartments nationwide could be the start of a 10-year development, according to the USAToday.com article.

 

A 2012 increase would make the third straight year of rising rents. More annual increases are expected as apartment builders hustle to catch up with demand.

 

"You could see 10 years of a strong apartment market," says Ronald Johnsey, president of apartment market researcher Axiometrics.

 

The main factors driving the demand? They are, according to USAToday.com:

 

  • Job growth: The article cites IHS Global Insight, which predicts that the U.S. will create 150,000 jobs a month in 2012 (up from133,000 per month in 2011).

  • A decline in homeownership: The Great Recession and the housing bust really put the brakes on American’s love affair with the typical American Dream of purchasing a single-family home (or any home, for that matter). The article cites the U.S. Census Bureau statistic that saw that only 66.3 percent of Americans owned their own home in the third quarter of 2011, a decline from 69 percent in the third quarter of 2006.

  • Not enough new apartment construction: Demand has risen faster than developers can build apartment buildings. Experts believe, however, that as the units come on the market, rental rates should increase just about three (3) percent a year.

 

Renters who are finding that they may not to be able to afford the type of apartment as before should be glad they’re not living in San Francisco or San Jose. These two cities, according to USAToday.com, have had the highest jump in rental rates of any major cities in the country, with increases of 14 percent (San Francisco) and 12 percent (San Jose).

 

Makes Houston's "minor" increase of (at the most) 4.5 percent seem downright reasonable! If you’re a property owner tired of going it alone (finding reliable tenants, providing upkeep on your property, etc.) and you want to take advantage of Houston’s rising rental rates, give In the Loop Properties a call. Whether you own a single-family home or a multi-unit apartment complex (large or vast), we’ll handle all the details of renting out your property, from upkeep to finding tenants, to collecting rents, to fixing leaky toilets and other repairs. All you need to is deposit your tenants’ rental checks!

 

We look forward to serving you!

 

The occupancy rate for high-end apartments is 93.4 percent, and the rents are up about 8 percent over last year to an average of $1,237 per month, according to the data firm. That's the highest rents have been, McClenny said.

 

As most can see around Houston and especially inside the 610 loop. There are a lot of new apartments beginning construction which in turn is only going to raise the rent of other apartments inside the loop. Most development seems to be happening on the West side of the 610 Loop. “More than 3,500 units in a dozen complexes are under construction primarily inside the 610 Loop and around the Galleria. Nearly 8,700 more are proposed, according to Houston-based Apartment Data Services. Most, if not all, are being planned with top-notch finishes and high dollar rents,” according to an article in the www.Chron.com Most of these units will not be ready till late 2012 the earliest. In turn this has raised rents and escalating at a high rate, plus landlords of upscale Inner Loop properties have stopped offering aggressive concession packages.

 

Apartment Location Services with In the Loop Properties

If you’re looking for an apartment, home or townhome in Houston’s Inner Loop area, come to the experts at In the Loop Properties. We will help you find the apartment or house that suits your needs as well as your budget. Contact us today at 713.521.7368, so we can help you find your dream home quickly and easily! We look forward to hearing from you!