Camden: declining outlook for Houston apartment market in 2016

​HOUSTON – Camden Property Trust issued a negative outlook for the Houston apartment market, which is bracing for more energy job cuts this year. 

The multifamily company gave the local apartment market a C grade with a declining outlook for 2016.

In fact, Houston—which represents Camden’s second-largest market with 12 percent of its apartment portfolio—had the worst outlook of any of its 16 markets nationally.

Despite its negative outlook for 2016, Camden CEO Ric Campo said he remains bullish on Houston’s apartment market long term.

Although oil prices are falling, revenue from Camden’s Houston apartments increased 3 percent year over year in 2015.

Revenue continued to grow because several competing apartment projects—representing between 6,000 and 7,000 new units—delayed their opening in 2015 due to inclement weather and shortage of construction workers.

New leases among Camden’s Houston apartments were down 2 percent, but renewals were up 3.5 percent year over year during the fourth quarter. 

There were no significant increases in move-outs due to energy job cuts in Houston.

Campo stressed that despite all the headlines about energy layoffs, Houston ended 2015 with a net job gain of 23,000 jobs. The city’s energy sector lost 31,000 jobs, but that loss was offset by 54,000 jobs gained in the health care, government, technology and other fields, according to the Greater Houston Partnership.​

Occupancy rates are still holding, however, in Camden’s apartments because most energy layoffs are affecting older employees, who tend to live in single-family homes. 

Many younger energy employees still have jobs in the industry and can afford to keep renting apartments from Camden.

Still, Camden is putting the brakes on new apartment starts in Houston amid the oil slump.

Campo announced earlier this week that there won’t be a 2016 start for its highly anticipated downtown Houston project, Camden Conte. The first phase of the project, a 20-story, 550-unit tower, is in the company’s “shadow pipeline,” perhaps for 2017.

Outside investors are swirling around Houston, hoping to find good deals on apartments amid the oil slump.