Oversupply of apartments creating cheaper housing in Houston
Building continues, even as Houston's economy slows down
HOUSTON – Cranes and crews are all over town, putting up new luxury apartment buildings in some of the hottest neighborhoods. The building continues, even as Houston's economy slows down. That has created an oversupply of apartment units that could take years to fill.
It's bad news for developers, but good news for renters looking to save some money.
Sarah Cleveland chose trendy midtown. She and her dog, Shakespeare, love it there. She just signed a new lease at about the same rent as last year.
"I am paying $1,215. The deals, that's pretty much the best I could get in this area. I love having places to walk to. I like being away from my work."
Analysts said the area is now in a renter's market.
"Right now, we are overbuilding, and we are going to continue to overbuild," Patrick Jankowski, with the Greater Houston Partnership, said.
Jankowski said that means renters can find deals because with 45,000 new apartment units expected to be added this year and next, the area is maxed out, building more than could be filled in three of the region's best years.
"A lot of anecdotes out there of ‘their manager is willing to reduce their rent’ to make sure that they don't leave. But if you're out there looking for a new apartment, you can get two months free rent, sometimes you can get a gift card on top of that," Jankowski added.
In a top of the line apartment, Jankowski said the savings could add up to an extra $3,000 a year.
"Rents are soft now. But they're going to get even softer over the next six months," Jankowski said.
Cleveland and Shakespeare hope to stay where they are and hopefully pay less.
"I would like to stay here but if it goes up, I can't. I've enjoyed it though."
Real estate experts said crude will have to hit about $70 a barrel before Houston becomes a landlord's market again.