According to the latest Houston Multifamily Market Report from 2Q 2024 by Marcus & Millichap, the luxury segment of Houston’s multifamily market is displaying resilience. Despite new supply pressures, vacancy rates in this segment have decreased.
Some key insights from the report include:
– In March 2024, Houston’s luxury-tier units saw a decrease in vacancy rates by 10 basis points year-over-year to reach a rate of 7.1%, making it the only segment with an annual contraction.
– Class C properties faced challenges as their vacancy rates rose by 100 basis points year-over-year to reach a rate of 8.3%. This is also the highest first-quarter figure since 2017.
– The expected increase in inventory for the Houston metro area is minimal, with projected deliveries for this year just above the average of last decade at around16,300 units.
– Average effective rent in Houston is expected to slightly increase and reach $1,372 per month in2024 due to softening demand and rising vacancies.
– Despite slower job growth projections for other markets nationally,Houston remains strong and ranks second-highest employment addition nationwide for2019.
Overall,the multifamily market outlook shows little changeinHouston despite some challenges faced by certain segments such as Class C properties.However,Houston continues its trend towards robust job growth which will continue driving demandfor housinginthe city.
