Economic and demographic forecasts offer a positive outlook for the Houston apartment market in 2009 and for years to come, according to the 2009 National Apartment Report by Marcus & Millichap. “The Houston apartment market will remain attractive to investors, supported by a wide array of options and rising cap rates that were in the mid-7 percent range at the end of 2008,” Michael Hoffman, regional manager of Marcus & Millichap’s Houston office, said. Following are some of the most significant aspects of the Houston Apartment Research Report:

• Employers are expected to generate 13,400 jobs in Houston this year, a 0.5 percent increase.
• Development activity will remain robust in 2009 as 9,100 apartments are delivered, a 1.5 percent expansion of stock. Last year, 10,200 units came online.
• Supply-side pressure will push vacancy up 110 basis points to 11.4 percent this year, after a 150 basis point rise in 2008.
• As vacancy creeps higher in 2009, owners will offer greater concessions. Asking rents are projected to finish the year at $771 per month, a 1.6 percent gain, while effective rents advance 0.9 percent to $711 per month.
• Brazoria County apartments received a boost late last year from Galveston residents displaced by Hurricane Ike. The improved occupancy levels are expected to be short-lived, however, and should not significantly impact metro-wide fundamentals in 2009.