The rolling two-year data for Houston shows the steep decline in rent growth since early 2015, as well as volatile occupancy since early this year. Of the 25 Houston submarkets with more than 1,000 units, there were five that topped the list for annual effective rent growth in September 2016, with Alief/Kirkwood at number one with 3.5% annual rent growth. Of note: 13 submarkets had negative rent growth in September. The urban-core Montrose/River Oaks submarket, where the bulk of the new supply is going, had rent growth of -8.1% in September.

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HOUSTON—Houston employers are starting to add more jobs outside of the energy industry, but it has yet to affect the metro's apartment market, according to Axiometrics, the apartment and student housing number cruncher. Even though 19,600 Houston-area jobs were created in the 12 months ending in August, annual effective rent growth continued to slide, reaching -3.1% in September, as compared to 2.6% for the national effective rent growth.

“Job gains may be picking up month-over-month, but they are nowhere near what they were even a year ago,” said Stephanie McCleskey, vice president of research for Axiometrics. “We see the diminished demand not only in the negative rent growth, but in occupancy rates, which were the lowest they've been since April 2012.”

In September, Houston's average rent was $1,075 versus $1,290 for the national average rent. And, Houston had a 92.7% occupancy versus a slightly higher 95.1% national occupancy.

“After softer fundamentals this year and next, expect fundamentals to rebound in 2018 and 2019,” KC Sanjay, Axiometrics senior real estate economist, tells GlobeSt.com. “The soft fundamentals in 2016 and 2017 can be attributed not only to slow job gains, but also to increases in new supply. We're expecting job growth to pick up and new supply to simmer down in 2018 and 2019, which will improve the fundamentals.”

The rolling two-year data for Houston shows the steep decline in rent growth since early 2015, as well as volatile occupancy since early this year. Of the 25 Houston submarkets with more than 1,000 units, there were five that topped the list for annual effective rent growth in September 2016, with Alief/Kirkwood at number one with 3.5% annual rent growth. Of note: 13 submarkets had negative rent growth in September. The urban-core Montrose/River Oaks submarket, where the bulk of the new supply is going, had rent growth of -8.1% in September.