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Discover insights from the Q4 2024 North Houston Commercial Real Estate Market Report, highlighting a significant drop in multifamily starts—a potential signal for future rent growth. Explore expert analysis from Robert Fiederlein, Vice President of Planning and Infrastructure, and North Houston District’s trusted real estate authority.
Often times, graphs and charts can make a point better than words. In this quarter’s CRE report, Robert lets the graphs and charts make the point with just a little narrative to go along with it.
For Q4 2024, the main point is the classic principle of economics – supply and demand and its impact on prices. As we all know, the principle is that as supply tightens and demand either stays strong or grows, prices rise. The first half is well underway both nationally and locally in the multifamily market and the latter, in the form of rent growth, is perhaps just around the corner.
Nationally multifamily starts are at their lowest in over 5 years and have declined for 6 straight quarters going back to Q1 of 2023 (Chart 1). Nowhere has this been more dramatic than in Houston (Chart 2). In Houston, per CoStar data, starts have dropped a whopping 97% from Q1 of 2022 to Q3 of 2024, from 9,200 units to 300 units. Austin and Dallas-Fort Worth have seen similar drops but not quite as dramatic as Houston’s drop.
Data-Driven Discussion
Hyperlocal Focus
These trends are evident in the North Houston District as well. The District presently counts 80 complexes totaling just under 19,000 units within its boundaries. Annual rent growth appears to have bottomed out in mid-2024 and ticked up slightly from 1.4% to 1.5% from Q2 to Q3. In short, similar to national trends, the North Houston District multifamily market appears well on its way to a robust next several years.
