Texas Markets Rank Tops Nationally for Apartment Demand

by  - PropertyManagementInsider.com

Among folks who pay even the slightest bit of attention to what’s happening in local economies across the country, it’s not exactly breaking news that lots of jobs are being added in Texas. The Great Recession that so many spots nationally are still struggling to recover from was barely a blip on the radar screen across much of the Lone Star State, and job growth has been at or even above the past norms for quite a while.

What you might have missed unless you pay really close attention to the stats, however, is that early figures for job production in 2013 show the economies in Texas kicking into even higher gear and breaking further away from the pack.

That’s particularly true in Houston.

Sure, Houston is the country’s growth leader in terms of the absolute number of jobs created, as it has been for the past couple of years. The latest figure from theBureau of Labor Statistics places that number at 118,700 jobs on an annual basis. What’s changed is that Houston is now also in the #1 position for percentage expansion among the 100 largest markets in the U.S. The metro’s 4.5% growth rate is a truly phenomenal performance given the Houston area is more than three times the size of all but one other place registering growth of 3% or better.

No surprise, Dallas/Fort Worth is the big-market bridesmaid at this wedding, though the 3.7% job growth rate in North Texas really isn’t quite in the same category with Houston’s impressive showing.

Jobs translate to new household formation and apartment demand, right?

Thus, it’s no shock to see the two biggest job producers among the nation’s really large metros also at the top of the charts for apartment leasing during the year-ending 1st quarter. Despite adding fewer jobs than Houston, Dallas/Fort Worth actually garnered the most apartment demand – 11,194 units, compared to 8,044 units – mainly because D/FW operators worked especially hard in order to get a meaningfully bigger block of completions through initial lease-up. Dallas/Fort Worth registered additions totaling 8,443 units during the past year, versus the 5,626 units finished in Houston. The Houston crowd probably isn’t complaining about a little less demand compared to the D/FW tally, however, as they did notably better on rent growth – 3.8% in Houston, relative to 2.3% in Dallas/Fort Worth.

Over the next year or so, look for it to continue be a neck-and-neck race between Houston and Dallas/Fort Worth for the lead in apartment absorption nationally. Houston should continue to have the key advantage of a faster-growing economy, but D/FW will continue to add more new product completions that operators will be pushing hard to get through lease-up.

 

 

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