As an apartment locator, Tirey Counts is usually fielding calls and juggling multiple clients this time of year as an influx of students attending area universities and medical programs look to secure housing for the upcoming semester.
This year has been different. Instead of calls from students, he’s hearing from Houstonians who are looking to move to cheaper apartments or need a two-bedroom unit because they’re getting a roommate.
“People are much more budget conscious because they’re not sure where this is going or they feel their jobs are insecure,” Counts said.
Houston’s apartment market, which would normally be thriving this time of year, is in a pandemic-induced slump.
Apartment occupancy has dipped to about 89 percent, falling about a half percentage point in May, according to new estimates from Houston-based. The average rent this month is expected to be down around $13 from the end of March to $1,046.
“We would normally see bumps in April, May and possibly June, and it’s just not there,” Bruce McClenny, president of the apartment data firm, said. “We’re seeing this same situation in every market we cover.”
In the Class-A apartment category, generally considered to be the newest properties with high-end amenities, the average rent has fallen 3 percent since the end of March to $1,497, the biggest decline among all classes of buildings.
A bumper crop of new units could exacerbate the slowdown.
Developers have completed construction on about 9,000 units so far this year and another 9,000 are expected to open by the end of 2020, McClenny said. Some of those projects could experience delays amid labor shortages or supply chain disruptions.
Seeking to avoid a flood of empty units, some landlords have waived late fees on rents and offered payment plans to their tenants.
The National Multifamily Housing Council found 90.8 percent of apartment households made a full or partial rent payment by May 20, according to its latest survey, which encompassed 11.4 million units across the country. That’s a decline of 2.2 percentage points from the same period a year earlier but up from 89.2 percent that had paid by April 20 of this year.
The council has pushed federal lawmakers to support renters with a national rental assistance fund and assist landlords with expanded mortgage forbearance.
A point of concern is what will happen after the $600 weekly additional unemployment benefit that has helped laid off workers pay their rent and other expenses expires at the end of July.
Even with the extra benefit, the need for assistance remains high. Earlier this month, the City of Houston exhausted $14.4 million in rental assistance funds within 90 minutes of it being offered. The funds were allocated from the $404 million in federal aid the city received through the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The aid shortfall came as evictions remain a threat to the market.
On May 18, the Texas Supreme Court lifted its two-month stay on eviction proceedings. While landlords were able to file eviction cases during that time, data show an 85 percent decline on eviction filings compared with the same period last year, when more than 10,000 cases were filed in Harris County, according to Houston-based data firm January Advisors.
The big drop was likely due to a combination of factors, including the general slowdown of business activities, leniency from property owners and stimulus payments, January Advisors founder Jeff Reichman said in a blog post last week.
“Don’t let this 85 percent drop fool you: 1,465 eviction cases is quite a lot compared to the case volume of similar cities,” he wrote. “And if court volume ‘goes back to normal’ — that is, the number of cases filed looks like it did in previous years — we will see thousands of new eviction cases filed next month.”
Counts, the apartment locator, has been getting more calls from people asking for help finding properties with landlords who would work with tenants with evictions or who had broken their leases.
“Generally, the sad, hard-luck stories seem to be more prevalent,” Counts said.
Publication: Houston Chronicle