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How COVID-19 Really Affected the Texas Multifamily Market

The COVID-19 pandemic and resulting economic conditions created one of the most challenging eras in the multifamily industry. As businesses locked down during the spring and summer of 2020, rents and occupancy declined in downtown and inner-city areas across the country.

Texas markets were no exception. Suburban markets remained stronger during this time, but cities such as Austin and San Antonio struggled. As college classes moved online and tourism became nearly nonexistent, markets that depended on renters from those activities were hit harder than others.

Houston was already struggling with an oversupply of rental units, and the energy sector was in a downturn. Both factors caused sluggish rents and occupancy. Dallas/Fort Worth experienced some downturn but was in a better position overall than the other three major Texas metropolitan markets.

 What a Difference a Year Makes 

Nearly a year and a half later, the change and growth in all Texas multifamily markets has stunned many in the apartment industry. The reopening economy has produced record levels of absorption. Pent-up demand; in-migration from California, New York and Chicago; and homebuyers being priced-out of the market are the most likely stimulants for the hyper-activity.

The multifamily market is experiencing Hockey-Stick-shaped growth for rent and occupancy levels as the apartment industry responds to the reopening economy.

 What Does the Future Hold?

Since we are in unprecedented times, it is difficult to state what will happen next. Traditionally, rental and occupancy rates increase in the summer and early fall, and then level off in the winter. Job growth has slowed, and new supply has been disrupted, which is likely to favor landlords in 2022. Single-family home prices will continue to lock buyers out of the market, increasing rental demand. Because 2021 has been so outstanding in terms of rent and occupancy growth, 2022 will most likely be a year where the term “reversion to the mean” seems appropriate and safe as a forecast for rent growth. In other words, expect rent growth of 4 percent to 5 percent in 2022. Occupancy levels will hold and likely improve as the supply and demand dynamics described above play out.

Multifamily Data Helps Property Managers, Owners and Investors

At ApartmentData, we provide data solutions for a wide range of professionals in the multifamily industry. Whether you need property management data to help build budgets or need multifamily data research to help you invest in the right property, our reports help provide you with the information you need. We continuously update information to help you achieve your objectives. Call us today at (800) 595-8730 to learn more and request a demonstration of our services!

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