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Q3 2022 | Houston Multifamily Market Report

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Key Takeaways
  • Occupancy dropped slightly over the quarter
  • Quarterly absorption decreased 78% 
  • Average rents rose on a quarterly and annual basis 
  • The quarterly median sales price and cap rate dropped
2022_Q3_Multifamily_Occupancy Rate 2022_Q3_Multifamily_Net Absorption 
2022_Q3_Multifamily_Under Construction
 2022_Q3_Multifamily_Monthly Rent

 

Houston Highlights

Demand for multifamily housing slowed between quarters recording 743 units of net absorption compared to 3,322 the previous quarter. The average monthly rent for multifamily units increased marginally over the quarter from $1,251 per month in Q2 2022 to $1,261 per month in Q3 2022. There are more than 17,500 units under construction and another 35,200 units are proposed. Occupancy remained fairly steady over the quarter decreasing by 20 basis points from 91.2% in Q2 2022 to 91.0% in Q3 2022.

Market Indicators

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Historic Comparison
 2022_Q3_Multifamily_Historic Comparison 
 
Market Fundamentals

 2022_Q3_Multifamily_Market Fundamentals

Houston’s overall occupancy rate decreased 60 basis points over the year. The average monthly rent rose 8.2% from $1,166 in Q3 2021 to $1,261 in Q3 2022. 

Pricing & Sales Volume

After reaching a historical high in Q4 2021, Houston’s multifamily investment sales volume dropped dramatically in 2022 from $8.6 billion to $2.3 billion in Q3 2022. Sales volume decreased 39% on an annual basis between Q3 2021 to Q3 2022 according to our data provider, Real Capital Analytics.

Houston Sales Volume ($)

2022_Q3_Multifamily_Sales Volume

 
Median Price per Unit  

Houston’s median sales price per unit decreased by 9.0% over the quarter from $131,870 to $119,975. The Texas median price per unit recorded the largest quarterly increase of 20.7% from $135,415 in Q2 2022 to $163,408 in Q3 2022. The U.S. recorded an increase of 1.8% over the quarter.

2022_Q3_Multifamily_Median Price Per Unit

 

Cap Rates

Houston’s multifamily median cap rate decreased from 4.7% to 4.6% over the quarter. The Texas median cap rate decreased from 4.5% to 4.3% while the U.S. median cap rate remained at 4.6%. On an annual basis, Houston’s and the U.S. median cap rates fell from 4.8% in Q3 2021, while the Texas median cap rate fell from 4.6%.

Median Cap Rate

  2022_Q3_Multifamily_Median Cap Rate

  

2022_Q3_Multifamily_Fountains of Rosenberg

Colliers finalizes sale of Fountains of Rosenberg

Colliers has announced the sale of Fountains of Rosenberg at 3419 Fountains Drive in Rosenberg, TX. The buyer was Momentum Multifamily. The seller, Mosaic Fountains LP., was represented by Chip Nash, Bob Heard and Jaleel Adatia of Colliers.

The property is a premiere community with 184 units and 167,608 square feet. The community features a resort-style pool with a luxurious sun deck, state of the art fitness center and has had recent renovations. Designer two-tone paint, stainless steel appliances and stately two-inch blinds with light fixture upgrades make this an ideal investment property for long-term profit.

Fountains at Rosenberg is conveniently located adjacent to Seabourne Nature Park and just south of Highway 59. It is located near multiple shopping centers, restaurants and entertainment venues.

 

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Q3 2022 | Houston Multifamily Market Report

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Related Experts

Lisa Bridges

Director of Market Research

Houston

Lisa joined Colliers in 2010 as Director of Market Research and has 37 years of commercial real estate experience. Lisa initiates proactive market research projects to further the business goals of the company. She writes and prepares 29 market reports annually, including quarterly reports on Houston's retail, office, industrial and healthcare properties.  Further, she prepares statistical ownership reports for various clients as well as an annual Houston Economic Overview. Lisa also creates PowerPoint market presentations, trade journal articles, and other marketing materials supporting the company's business endeavors. She works with senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events.  Lisa works closely with the company's brokers to develop effective custom market research material specific to existing and potential clients.

Lisa serves on the Colliers Editorial Board, the Colliers U.S. Research Council, and is a recipient of the Colliers Researcher of the Year Award.

Lisa earned the Commercial Property Research Certification (CPRC) from Colliers University.  CPRC is the first and only accreditation for commercial real estate research professionals. It offers a professional development path to increase strategic and tactical expertise in marketing/research, knowledge of the industry and capabilities with commercial real estate tools.

View expert

Chip Nash

Senior Managing Director, Multifamily Investment Properties

Houston

Chip Nash joined Colliers Houston in September 2020 and is Senior Vice President and a Director of Multifamily Invest Properties.

Before joining Colliers, Nash was a Managing Director for JLL focusing exclusively on private capital investment sales of multifamily properties for eight years. Previous to JLL, Nash held similar positions at Berkadia, Hendricks and Partners, and Pinnacle International Realty Group. He has negotiated hundreds of transactions encompassing a 25+ year track record in investment sales along with a previous seven years spent in the commercial banking business for a conglomerate of banks owned by Pulte Home Corporation.

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Bob Heard

Senior Managing Director, Multifamily Investment Properties

Houston

Bob is a Senior Vice President within Colliers’ Houston office and a director of Multifamily Investment Properties. Bob brings 15 years of real estate experience specializing in capital markets and multifamily investment sales. Over the course his career, Bob has been involved in all aspects of income-producing properties including the management, syndication, rehabilitation, purchase and sale of multifamily developments. Prior to joining Colliers, Bob was a Vice President within JLL Houston’s Capital Markets Multi-Family Investment Group. Prior to JLL, Bob was a Senior Associate with the multi-family investment sales group at Berkadia. Bob is a Licensed Real Estate Broker with a Series 7 License.

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Jim Humphries

Senior Vice President

Houston

Jim Humphries joined Colliers in Houston in 2015 and is part of the Colliers Investment Services Group (CISG). He specializes in multifamily assets with an emphasis on properties within Texas and the Southern United States.

Colliers Houston’s ISG team takes a consultative approach to commercial real estate which includes developing and executing strategies that are both consistent with its clients’ objectives as well as feasible in the current market environment.

Jim has 10 years of multifamily real estate experience. Before joining Colliers, Jim was an  analyst with the HFF Houston Multifamily group where he was directly involved in more than $6 billion in transactions. In that role, his responsibilities included underwriting and market analysis for both existing and to-be-built acquisitions and dispositions.

Jim’s primarily focus is on multifamily investment services and capital markets. His responsibilities include multifamily investment sales, business development, financial and debt analysis, market research, due diligence and offering memorandum production.

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Jaleel Adatia

Senior Associate

Houston

Jaleel is a Senior Associate at Colliers in Houston and specializes in Multifamily Investment Sales. He works with an exclusive list of clients to execute apartment sales across Greater Houston, creating portfolio expansions and value-add investment opportunities for innovative and senior buyers. 

Previously with Institutional Property Advisors (IPA), Jaleel achieved a gross sales volume of more than $500MM to date through the sale of more than 3000 units in the Houston MSA and interacted with clients and leaders in the industry to help develop property plans, overcome challenges, and exceed asset goals. 

Before entering the real estate world, Jaleel completed his master’s degree at Georgetown University in Sports Industry Management and earned a Bachelor of Arts in Business Administration from Furman University. After obtaining his education Jaleel played golf at a professional level and applies multiple skills learned out on the course into his business practices. 

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Todd Stewart

Senior Vice President

Houston

Mr. Stewart joined Colliers in September 2020 and is a Senior Vice President and Director of Multifamily Investment Properties. Mr. Stewart has 30 years of experience with investment properties. During the course of his career, Mr. Stewart and his partners have negotiated sales in the amount of approximately $12 billion in more than 500 transactions totaling 150,000 units throughout the United States. He has been ranked one of the top multi-housing specialists in Houston for the past 20 years and has worked with a variety of clients including individuals, private syndicators, pension funds, REITs, S&L’s, insurance companies and banks.

Prior to joining Colliers, Mr. Stewart was a Managing Director at JLL, a Senior Managing Director with HFF (Holliday Fenoglio Fowler, L.P.) and an Executive Vice President of the CBRE Houston Multi-Housing Properties Group. As a member of CBRE’s Major Accounts Group, Mr. Stewart was a top ranking regional and national multi-housing salesperson. He has been ranked as a Houston Business Journal Heavy Hitter and has received the Directors Award. 

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