Law of Supply, Demand Keeps Rents High in Southwestern US Multifamily Market

DALLAS-Dallas and Houston promise to be the gainers nationwide this year in rent momentum as the national economy feeds the multifamily industry, predicts MPF Research Inc.

The nationwide market watcher, based in Dallas, says job growth and interest rates have catapulted the multifamily industry into strong performers from coast to coast. Greg Willett, MPF’s editorial director and 16-year analyst, says that 2000 has been a landlord’s gold mine as rents and demand go up – a trend being bolstered by construction cuts in many parts of the southwestern US.

Austin’s 98% occupancy makes it one of the strongest markets in the nation, Willett told GlobeSt.com. “There’s a lot under construction and a lot to be completed, but the delivery’s not been that much,” he says of year 2000. Construction’s up 11.3% over the prior year, but only 7,746 permits had been executed between November 1999 and October 2000. And while more will come to market this year, Willett says demand could fall short and cause a softening in rents in the state capital. Austin had experienced an 8% rent growth in 2000 while Dallas was slightly over 3% and Houston, slightly under 3%.