Apartment Demand Is Strong in Texas, but So Are Rent Cuts
Despite strong apartment demand in many Texas submarkets, rent cuts are becoming more common. In fact, 60% of all Texas submarkets logged rent cuts in the year-ending 3rd quarter. While this is a trend happening all over the U.S., Texas submarkets are especially impacted, given the high volumes of new supply delivered in the Lone Star State in recent years. Austin, which has seen record new supply in the past five years, is especially prone to rent cuts. Every submarket across the state capital saw price declines year-over-year as of 3rd quarter, with some cuts getting as deep as 5% to 7%. In San Antonio, a little over 70% of submarkets are logging rent cuts, while Fort Worth is close with about 64%. The other half of the Metroplex, Dallas, is seeing price declines in about 53% of submarkets. Houston stands out as an exception among Texas markets. In contrast to previous cycles, Houston is experiencing fewer rent cuts due to limited supply, resulting in less downward pressure on rents. Less than 40% of Houston submarkets are logging rent cuts.
For more information on the Texas apartment markets, including forecasts, watch the webcast Market Intelligence: Q4 Texas Update.