After a tough April for the local apartment market, things aren’t looking much better in May. In fact, North Texas is on pace for a nearly 90 percent decline in May net absorption year over year.
As of May 13, just 123 units had been absorbed in North Texas, according to the latest numbers from ApartmentData.com. If this pace continues through the end of the month, net absorption is on track to fall nearly 90 percent year over year. In May 2019, North Texas saw 3,362 total units absorbed. This month is also on pace to see a fraction of the absorption April 2020 experienced with just 962 total units. Last month was also a fraction of April 2019, which saw 3,070 units absorbed.
Things aren’t looking much better for rents. As of mid-May, average rents in North Texas dropped $14 per unit since March 31. The fall represents a 1.2 percent decline, when rents averaged $1,175 per unit. As of mid-May, average rents are now $1,161 per unit. This could be the second month in a row of negative rent growth if the trend continues. Two months of negative rent grow would be a rare occurrence, especially given the time of the year.
The most significant drops have been seen in Class A units, where rents have fallen an average of $26 per unit to $1,482, a 1.7 percent decline. Class B units haven’t fared much better, falling an average of $17 per unit or 1.5 percent.
Experts believe renters in Class C and D units could be facing the most challenges these days brought on by the COVID-19 pandemic. Rents for these units have also declined. Since seeing an average drop of $7 or 0.7 percent from March 31 to April 30, average rents of Class C units have stayed at $988 in May. Though rents fell an average of $2 for Class D units between March and April, rents have recovered in mid-May, remaining unchanged from March 31.
Publication: Dallas Business Journal