Midland/Odessa Apartment Performance Plummets
The Midland/Odessa apartment market has gone from one of the nation’s top-performing markets to one of the weakest in just two years. The epicenter of the Permian Basin, the market is dominated by the energy industry, and local apartment performance tends to track volatile oil prices. Throughout much of 2018, oil prices generally ranged from $60 to $75 per barrel, and Midland/Odessa’s occupancy and rent growth reached local and national highs. Oil prices have trended downward since then and so has the local apartment market. In April 2020, crude oil prices fell into negative territory for the first time in history. Although prices have rebounded to around $40 per barrel since June, that’s still a low point for the market. In August, Midland/Odessa posted the nation’s weakest occupancy rate of 85%, down from a high of 97.3% in April 2018. During the past year alone, occupancy dropped 1,020 basis points. In response, operators initiated the nation’s most drastic effective asking rent cuts of 30.8%.