1Q13 DFW Multifamily Market Update

Written February 27th, 2013 by

2012 was a great year for the DFW economy as well as the DFW apartment market:

  • Population increased to 6,552,527 (up 1.4%)
  • Employment increased to 3,001,100 (up 2%)
  • Median Home Price increased to $161,370 (up 9.4%)
  • Supply of new units continues to be low, keeping pressure on occupancies to stay high
  • 2012 was 2nd year of below average apartment completions, totaling only 6,180 units
  • Average apartment vacancy declined 0.5% from 2011, reaching 6.4%
  • Average asking rent increased 2.8% from 2011, setting a record high of $834/month

Federal spending cuts and increased taxes will weigh down on the national economy in 2013. Nevertheless, GDP and employment are both expected to grow, and the apartment market should have another strong year.  Marcus and Millichap forecasts a positive 2013 market in DFW:

  • Job increases expected to be 2.2%, rising to 2.3% in 2014
  • Vacancy levels will continue to decrease to 6.1% and then to 5.5% in 2014
  • Rent growth of 4.2% expected, increasing another 4.8% in 2014

Nevertheless, we need to be cautious in our outlooks, as occupancy and rents are likely approaching a state of equilibrium.  Several factors will eventually ease, such as increased supply and easing of financing to homeowners.  The next few years will continue to be very strong, but growth should start to slow.

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