Employment gains, a moderate supply of new development and a high barrier to homeownership have bolstered strong multifamily demand in Orange County, pushing up rents and keeping occupancy over 96 percent.
The outlook for Houston’s multifamily sector will stay cloudy as the market continues to show signs of instability, mostly due to negative rent growth and decreasing occupancy in the upscale Lifestyle segment.
Despite a slowly shrinking population, the city’s multifamily market remains steady, bolstered by increased hiring in recession-resistant sectors. Through May, rents rose 0.3 percent, trailing the nation’s 1.5 percent rate, Yardi Matrix data shows.
Rent growth has been decelerating since it reached double-digit levels in 2015. As of May, the metro’s $2,675 average rent was more than double the national average of $1,316, according to Yardi Matrix.
A rapidly rising population is adding to the city’s congestion issues, but also fostering demand for apartments and pushing rents higher. Rents were up 2.9 percent to $1,108 as of May, and Yardi Matrix forecasts a 3.5 percent increase in 2017.