Austin renters may have reason to celebrate.
Apartment construction is at a 20-year high across the country, with an expected addition of 345,000 rental properties, and renters could see a payoff of plateauing rents and other positive changes, according to Yardi Matrix senior analyst Doug Ressler.
“With more units on the table, renters may be able to get some discounts and concessions on new leases, including one month of free rent, waived move-in fees, and free gym memberships,” Ressler said.
Austin Ranks 13th for Rental Property Growth in U.S.
The Austin-Round Rock metro area ranks 13th for rental property growth in the United States, with 7,435 new apartments expected to hit the market, according to data from the National Multifamily Housing Council. You don’t need to be an Austin Realtor® to know that the Austin real estate market is hot, with a booming economy and lively culture and a continual influx of newcomers moving to Austin. Still, compared to cities like Chicago and San Francisco, Austin remains an affordable living choice, attracting professionals from across the country.
Besides Austin, other cities in Texas that made the top 100 for rental property growth include Dallas-Fort Worth-Arlington, Houston-The Woodlands-Sugarland, San Antonio-New Braunfels, College Station-Bryan, Corpus Christi, Waco, Killeen-Temple, El Paso, McAllen-Edinburg-Mission and Lubbock.
Cities in the Texas Triangle (Dallas, Houston, Austin and San Antonio) have seen some of the greatest rental property growth in the country. The strong economy in these cities, combined with high growth rates, have made them favorites among potential investors.
Both millennials and baby boomers drive the demand for rental properties. Apartments offer flexibility and proximity to city centers, which now attract baby boomers looking to downsize, as well as the traditional demographic of young adults.
Rental Properties in Austin TX Hold Highest Rental Prices in the State, But Is That Changing?
High demand means rental property in Austin TX also has the highest rent prices and the lowest level concessions in the state. But Austin’s supply of rental properties finally seems to be catching up with demand. From 2011 to 2016, Austin rent prices have increased 5.8% a year on average. In contrast, this past year has seen an increase of only 1.4%. The occupancy rate has also decreased, to 93.3%.
“Austin has achieved an ‘equilibrium’ market condition where the overall supply and demand are in balance,” Charles Heimsath, a real estate market researcher, told the Austin American-Statesman. “This means that [in the Austin metro] rents are increasing at a very slow rate, if at all.”
For the moment, it looks like rent price growth is slowing, which is good news for renters in a market where buying a home tends to save money in the long run. But will the trend continue?
Many are skeptical. If the rate of Austin’s population growth and job creation continues — and evidence indicates that it will — the current relief for renters is just temporary.
Some analysts, such as Heismath, say the current plateauing of Austin rent prices will last for perhaps another year or two, before they start ballooning once again, when rental property growth fails to keep up with population growth. Data from We Are Apartments suggests the same and shows that Austin will be more than 114,000 apartment homes short in 2030. In addition, the 7,435 new rental properties figure actually represents a slowdown from last year’s increase of 11,900, equalling a 37% drop in construction.
Is Now the Right Time to Get an Austin Apartment?
It may be. All signs seem to point to it being the perfect time to get an Austin apartment. If you’re interested in an Austin apartment rental, be sure to check out our guide on how to find the perfect Austin apartment for you. If you’re ready to jump in and get started, head on over to our Austin apartment search tool. We can also assist you with apartments in Houston, Dallas and San Antonio, and the owners pay us, so it’s a free service to you!
Don’t wait too long if you want to take advantage of the plateauing Austin rent. In a few years, everything might change. But who knows, maybe by then you’ll be an Austin home buyer.
Habitat Hunters, Inc. has been in Austin since 1972, helping to make your Austin home buying and rental experience as smooth and as successful as it can be. If you’d like to learn more about Habitat Hunters, Inc., and how we can help you purchase or rent the Austin home or apartment you’ve always wanted, contact our Austin real estate agency today.