Tap To Call

Despite apartment absorption falling short of December 2018 and 2017, 2019 ended on solid footing for the local market, which saw a slight rise in occupancy and rents along with positive absorption overall, according to ApartmentData.com.

Dallas-Fort Worth’s apartment occupancy rate ended the year at 91.3 percent, up slightly from November’s 91.2 percent. Absorption remained positive at 596 units, thanks in part to no new apartment complexes entering the market in December.

Despite being positive, this absorption figure represents the second slowest month of 2019 for overall apartment absorption, only ahead of October’s 466 units. This figure also falls behind the last two Decembers, which saw 1,027 units absorbed in December 2018 and 675 units absorbed in December 2017.

Only Class A apartments saw positive overall absorption in December at 826 units. While positive, this was the worst month of the year for Class A absorption, as the second worst month saw nearly 600 more units absorbed. Class A units also hold the lowest occupancy rate in DFW at 86.2 percent. Interestingly enough, however, Class A units also experienced the greatest rise in occupancy in 2019, climbing from 83.9 percent in January to 86.2 percent in December. No other asset class moved more than half of a percentage point.

Asking rents remained nearly unchanged in December, rising a single dollar to an average of $1,158 per month. The per square foot ratio did not change, remaining at $1.32 per square foot. The average price of a Class A unit rose by $5 to $1,492 per month, with the per square foot rate rising slightly to $1.64.

In the last 12 months, rental rates have risen by 5.2 percent while 22,187 apartments were absorbed. Over the same period, 90 new communities opened, totaling 25,095 units.

As of the end of 2019, DFW’s apartment operating supply sat at 743,086 units across 3,152 communities. There are 103 communities under construction in the Metroplex, totaling 30,932 units, and 99 communities proposed, totaling 42,929 units. Over the last three months, annualized growth in Downtown/West End and Deep Ellum rose 12 percent while Oak Cliff South and North Dallas/Addison also saw over 5 percent annualized growth.

The end of the year saw 36 percent of all apartments in DFW offered with some sort of concession. More than half of Class A units have offered concessions, while only 34 percent of Class B apartments have offered some sort of concession.

Apartment occupancy dipped slightly across all other Texas markets, causing Houston and San Antonio to end the year under 90 percent. Austin’s occupancy rate is now that of Dallas’ at 91.3 percent. Austin is still the most expensive apartment market in Texas.


Publication: Dallas Business Journal

Article Link