MULTIFAMILY PERFORMANCE UPDATE
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Absorption |
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Absorption rates continue to be positive as of the 4th quarter 2008. The market absorbed 8,760 units for the period January to December, 2008. The Class A market fared the best so far, staying positive and absorbing 8,891 units. The Class B market absorbed 758 units. Absorption in the Class C market dropped to a negative 1,126 units, while Class D, continuing its positive trend for the first time since 2006, absorbed 237 units. As of Dec '08, out of 26,160 total units under construction, 22,813 are Class A units; the remaining 3,347 are Class B. An additional 14,381 units are on the drawing board. |
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| Rental Rates | |
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In contrast to decreased occupancy levels, rental rates posted an increase for the period ending Dec '08. Overall rents increased $0.014 per square foot (psf) TO $0.869 psf, their highest level on record. All classes reported increases in rental rates, with the class A and C market enjoying the largest increases. All classes have enjoyed steady rate increases since the third quarter 2007. |
| Occupancy | |
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Despite positive absorption for the year, overall Houston occupancy fell to 87.52%, as of December 2008. Class A experienced an increase from 86.92% in June '08 to 87.39% in Dec '08. Class B dropped slightly from 89.67% in June '08 to 89.31% as of Dec '08. Occupancy in the Class C market decreased from 86.44% to 84.99%, and Class D occupancy increased from 84.58% to 85.88% during the same period. |
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