Surge in demand boostsHouston’s apartment market

Demand for Houston-area apartments came roaring back in the third quarter, a newreport shows, after virusrelated shutdowns kept renters out of the market during the first half of the year.

Net leasing from July through September was up 10 percentover thesamequarter last year, according to RealPage, a Richardson-based real estate data firm. The increased activity was likely a result — at least in part — of pent-up demand from earlier in the year.

Leasing activity typically peaks in the second quarter. Houston-area apartment occupancy was 93.2 percent at the end of the quarter, down from94.3 percent a year earlier.

Despite the uptick, an abundance of supply hitting the market is testing demand.

“Even though our unemployment isn’t as high as it is nationally, there’s just too much supply,” said Ric Campo, CEO of Houston-based landlord Camden Property Trust. “We have higher vacancy in Houston than in our portfolio overall.”

Over the past year in Houston, more than 23,000 units opened and nearly 17,000 more are under construction, according to ApartmentData.com, a local consulting firm.

Rents here have been falling since March, with a brief rise over the summer. An 885square-foot apartment aver

aged $1,043 in September, ApartmentData.com said.

Across the country, the number of occupied apartments climbed 8 percent, as therewere enough new— or returning — jobs to allow newhouseholds toform, the RealPage report said.

Demand was especially strong in Houston, Dallas and Atlanta. Combined, those markets accounted for 17 percent of the third-quarter apartment absorption nationwide.

RealPage’s rent collection data for professionally managed properties shows that payments are barely below normallevels. In September, 95.5 percent of apartment dwellers in the Houston region paid rent, down 1.1 percent from a year earlier.

Because of lending constraints and depressed demand amid the pandemic, multifamily construction is expected to fall. That bodes well for a strong market — but not for a fewyears, Campo said.

“Houston looks pretty good in 2022, 2023,” he said, “but it looks pretty bad in 2021.”