Real estate
Multifamily housing market gains momentum in Spring, Klein area
Also of note
Patrick Jankowski, chief economist and senior vice president of research for the Greater Houston Partnership, said in a May multifamily market update that Houston has shifted to a tenant-friendly market, because: • Average multifamily occupancy is below 90%.
townhome complex that opened in June Two multifamily options are also slated to open next year along FM 2920: • Prose Foster: a 297-unit apartment complex expected to open by January • Saxon Pond Flats: a 360-unit apartment complex set to be completed in spring 2025 A spike in multifamily housing in the Spring area can likely be attributed to regional population and job growth and nearby retail development, said Steven Spillette, president of real estate research firm Community Development Strategies. “At a very basic level, we ... have to have housing for everybody ... coming here,” Spillette said. For multifamily housing projects to reach completion recently, developers and investors must have been purchasing land at least two to three years ago, Spillette said. However, he noted interest rates have since risen. “We are having a pause because of ... [raised] interest rates, and the developers have been having … difficulty in getting financing in the last year,” Spillette said.
Rental options have boomed in the Spring- area as roughly 20 multifamily developments have opened, broken ground or been announced since June 2023. According to prior reporting and data analysts MRI ApartmentData, nine apartment complexes and two rental townhome properties have opened in the Spring and Klein area since August 2023. Meanwhile, six properties are slated to open between August and the first quarter of 2026, and three more are being planned. Real estate experts said developers started multifamily projects two or three years ago when interest rates were at record lows. Bruce McClenny, industry principal for MRI ApartmentData at MRI Real Estate Software, said because of this trend, he saw more apartment complexes open in 2023 and 2024 than in his entire career.
• Rental rates have fallen over the last year. • Incentives such as free rent are prominent. • Developers continue to overbuild.
The Spring area’s average occupancy rate dropped from 92.6% in June 2022 to 86% this May, according to MRI ApartmentData. With 19,000 units under construction in the Greater Houston area and another 33,000 planned as of June 1, Jankowski said supply greatly exceeds demand. “An industry rule of thumb holds that Houston absorbs one apartment unit for every six jobs created,” he said. “At the current pace ... Houston will need to create 114,000 jobs to absorb what’s currently under construction.”
Houston metro area
Tomball/ Spring
Willowbrook/ Champions/Ella
According to MRI ApartmentData and previous reporting, some of the latest projects to open include:
45
249
• The Everstead at Windrose: a 194-unit rental townhome community that opened in May • Summerton at Spring: a 48-unit rental
69
290
99 TOLL
N
Multifamily housing snapshot Units opened in the last year Total units: 3,056 Units under construction Total units: 1,359
*ONLY ABOUT HALF OF PLANNED COMPLEXES HAVE ESTIMATED UNIT COUNTS AT THIS TIME.
Historical multifamily rental rates
$1,414
$1,200 $1,300 $1,400 $1,500 $1,100 $1,000 $0
HOLZWARTH RD.
$1,260
99 TOLL
$1,133
300
351
I N G S T U E B N E R R D .
Units planned Total units: 944+*
326
2920
314
318
48
276
297
Low income housing: A Saddle Creek B Torrey Chase Apartments C Willow Creek Manor D Oakwood Trails
194
360
136
June
Jan.
Jan.
May
351
2022
2023
2024
420
45
Historical multifamily occupancy rates
163
100%
87.5%
87.5%
D
249
203
90%
C
72
A
80%
336
264
84.7%
350
70%
B
280
1960
0%
N
June
Jan.
Jan.
May
2022
2023
2024
SOURCES: MRI APARTMENTDATA, LINCOLN AVENUE CAPITAL, STEWARDSHIP DEVELOPMENT, PEDCOR COMPANIES, DHANANI PRIVATE EQUITY GROUP/COMMUNITY IMPACT
SOURCE: MRI APARTMENTDATA/COMMUNITY IMPACT
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