Luxury living is flourishing in Texas. Only two places in the nation — the St. Louis and Las Vegas metros — were more active in high-end apartment construction last year than Dallas/Fort Worth and Houston. Nearly all — 98% in DFW and 97% in Houston — of the projects delivered in 2017 were luxury.
Conversely, high-end construction has slowed in Austin from 94% in 2015 to 65% in 2017. Nationwide, high-end rental properties had risen to 79% of apartment construction in 2017, which is a big jump from 52% in 2012.
This is partially driven by increased construction costs, but demand for luxury housing is supported by a high demand for multifamily communities versus homes, population growth and a strong economy, according to a report by Rentcafé.
The construction data is tracked by Yardi Matrix and covers a total of 80,000 large-scale apartment developments with at least 50 units across more than 130 markets in the United States. It classifies high-end and luxury as Class B+ and above, catering to groups it calls “lifestyle renters” or “renters by choice” that typically are double-income with no children at home.
So far this year, developers in Houston and Dallas-Fort Worth have opened only luxury-grade apartments. Nationally about 87% of all the new development during the same period was high end.
The attention to luxury has drastically heightened the apartment landscape across the country and in Texas. In Houston, luxury product made up 36% of the total large-scale apartment inventory, which was ranked fifth behind Charlotte (50%), Austin (45%), Las Vegas (38%) and Boston (36%). Dallas trailed with 35% of its multifamily product tagged as high end.