Austin Apartment Rent Growth Slows
First, let’s be clear that we’re talking about Apartment Rents, which are different than Single Family Home (SFR) rents.
The Austin Business Journal just published an article stating that apartment rents are off by a large margin from this time last year and especially when compared to the rest of the county. The ABJ article references a report from Dallas based, Axiometrics.
Data
- Austin apartment market experienced one of the biggest drops in annual rent growth in the country during Q3
- Austin’s annual rents increased just under 1 percent in the third quarter, down from a 5.6 percent increase in Q3
- Developers are delivering 8,000 new units this year
- New multifamily permits dropped nearly 30 percent in the last year, and that leveling of product against demand should help stabilize the market in coming years
Why
- Axiometrics attributes both factors to the slowing economy and lack of new jobs
- Significant inventory of unsold houses and condos has put pressure on housing prices nationwide and made it more difficult for apartment companies to raise rents
Predictions
- Market’s vacancy rate will rise to 8.1 percent in 2009
- Austin is likely to fare better than the rest of the country in the rental realm
- Federal government is likely to try to instill confidence in the for-sale housing market to move unsold inventory. That would likely lead to more renters being pulled out of apartments to occupy homes and could cause more short-term instability in the national rental marketplace
To read the full Austin Business Article, click here
To read the full Axiometrics report, click here.
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