DFW’s Hidden Multifamily Demand Gem

The dynamics of the apartment market in Dallas/Fort Worth (D/FW) area have experienced a fascinating shift in the second quarter of 2023. Despite being a third of Dallas’s size in terms of apartment inventory, Fort Worth has surprisingly accounted for nearly half of the D/FW total absorption.

1. A Shift in Patterns: Fort Worth’s Rising Influence

In a striking reversal of the usual trend, Fort Worth became the star player in D/FW’s apartment market in Q2 2023. This quarter saw Fort Worth accounting for a staggering 46% of the total absorption in D/FW, the highest ever quarterly ratio for the market, barring the previous quarter.

To put things into perspective, in the first quarter of 2023, Fort Worth had a moderate absorption of 314 units, while Dallas experienced a net move-out from 251 units, as per data from RealPage Market Analytics.

2. Outperforming Past Records: Fort Worth’s Q2 2023 Performance

In the period from April to June 2023, Fort Worth witnessed an absorption of 2,560 units— a remarkable performance that easily surpassed the average second-quarter absorption from 2010 to 2019 (pre-COVID era) of around 1,700 units. This absorption rate was on par with Dallas’s Q2 2023 absorption of 3,000 units, a noteworthy achievement considering the size of both markets.

3. The Pre-COVID Era: Fort Worth’s Position in the D/FW Market

In the decade before the global pandemic, Fort Worth’s apartment demand made up a mere 12% of the D/FW total on a quarterly basis and 18% annually. Given that Fort Worth’s apartment market, comprising about 230,000 units, is roughly a third the size of Dallas’s 670,000 units, these figures were expected. However, Q2 2023’s numbers tell a different story.

4. A Steady Climb: The Boom of 2022

The apartment demand surge in 2022 saw Fort Worth gradually claim a larger percentage of D/FW’s demand. Throughout the four quarters of 2022, Fort Worth consistently accounted for approximately 24% of D/FW’s demand. This rate was not only significantly higher than the average but also more consistent.

5. Quarterly Swings in Apartment Absorption

Swings in quarterly apartment absorption are a common occurrence, and this is true even with the Dallas/Fort Worth breakout ratios. However, Fort Worth’s impressive performance in Q2 2023 allowed the market to regain its demand on an annual basis.

6. Year-Ending Q2 2023: A Comparative Analysis

By the year-ending Q2 2023, Fort Worth absorbed 909 units. On the other hand, Dallas was still addressing net move-outs from nearly 3,500 units.

7. A Closer Look at Fort Worth’s Submarkets

Over the past year, apartment absorption has been strongest in Fort Worth’s North Fort Worth/Keller and Burleson/Johnson County submarkets, with 1,645 units and 1,372 units absorbed, respectively. These submarkets received over 1,600 new units of supply concurrently. Conversely, East Fort Worth and Southwest Fort Worth were the weakest submarkets for apartment absorption over the last year, both recording net move-outs from approximately 700 units.

8. The Dallas vs Fort Worth Apartment Markets: A Comparative Study

Understanding the unique dynamics of the Dallas and Fort Worth apartment markets is crucial for investors and stakeholders. You can dive deeper into the similarities and differences between these marketshere.

9. Final Thoughts

The remarkable rise of apartment demand in Fort Worth in Q2 2023 marks a significant turning point in the D/FW apartment market landscape. This shift underscores the importance of monitoring market trends, understanding the dynamics of different submarkets, and staying ahead of the curve.

10. Looking Forward

As we look towards the future, it’s evident that Fort Worth’s apartment market is a force to be reckoned with. It will be interesting to see how this market continues to evolve and reshape the D/FW apartment market landscape in the coming years.

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