Report: Dallas / Fort Worth apartment rents reach all-time high in 2014

Dallas-Fort Worth apartment rents have hit an all-time record high in 2014, climbing 4.9 percent year-over-year, according to MPF Research, a division of RealPage Inc. The record-high rents are bolstered by a 13-year peak in apartment occupancy in North Texas, with rents climbing 15.8 percent over the last four years. “Annual increases above 4 percent…

Dallas-Fort Worth apartment rents have hit an all-time record high in 2014, climbing 4.9 percent year-over-year, according to MPF Research, a division of RealPage Inc.

The record-high rents are bolstered by a 13-year peak in apartment occupancy in North Texas, with rents climbing 15.8 percent over the last four years.

“Annual increases above 4 percent are rare in this market,” said MPF Research Vice President Greg Willett, in a prepared statement. “Because we’re such a construction hot spot, the flow of new product moving through initial lease-up normally holds rent growth below the national norm.”

Throughout North Texas, big rent increases registered across the board from bottom-tier Class C communities to top-end Class A units. The middle-market Class B properties saw the biggest increase of 5.3 percent, with Class C properties clocking a 3.7 percent increased and top-tier Class A properties rising 4.7 percent.

The average monthly rent for an apartment in North Texas is now $919, according to MPF Research data. The year-end occupancy of apartments in North Texas reached 94.7 percent, which is the best occupancy performance in the region since 2001.

In 2014, developers brought 15,575 new apartment homes to market, which mirrored the amount of absorption, or leasing activity in the region, which totaled 15,226 apartments. North Texas’ new supply of apartment homes was the country’s second biggest behind Washington, D.C., which built 18,955 apartments last year.

MPF Research expects another strong year for multifamily real estate in 2015, although 2014 probably brought the peak results for this market cycle. Occupancy and rental growth are expected to cool as more construction brings new apartments to the market.

Right now, there are 30,196 apartments under development, with just over 22,000 of those scheduled for completion in 2015. That pushes the new supply of apartments in North Texas up 24 percent year-over-year.

“The leasing environment is about to get much more competitive in Uptown, downtown and Oak Lawn,” said Willett, who said those neighborhoods are commanding rents averaging from $1,700 to $1,800 a month.

“Rent cuts to help move a huge block of new supply through the system could be on the way, especially given the number of renter households who can afford the high prices commanded by new apartments there is somewhat limited,” he added.

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Written by , Staff Writer-Dallas Business Journal. Link to the original article here.

 

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