As if the Austin apartment market had now tightened enough with shrinking availability and rising rents, the most recent report for the 3rd quarter published by Marcus & Millichap predicts further tightening. Here are the highlights:
New Construction > Apartment inventory will grow 1.8% in 2012 with 3000 units still to come on the market this year. That number is up from only 258 in 2011. The bad news – almost all of the new units are higher-end properties that will provide little relief to the middle and lower-end apartment communities.
Vacancy > Despite the new construction units coming available, vacancy will remain the lowest its been since 2001 at only 4.3% of total units
Rent > Asking rents will climb 4.2% to $925 and effective rents will rise 5.6% to $851
- Building permits have been issued for 7600 new units in the past 12 month vs. less than 1000 in the prior year
- The lowest vacancy rates are in the Far South (2.9%) and the highest in Round Rock/Georgetown/Hutto (4.9%)
- Rental rates rose the most in the Near North Central (5.8% to $731) and rose the most in the Near South Central (1.1% to $943)
- The highest effective rates are found in the Central area ($1060) and the lowest effective rates are found in the Near North Central ($731)
Summary > If you are potentially renewing your lease soon expect to see a slight increase in your rent for your next term but you shouldn’t see as significant a jump as last year. If you are looking for an apartment to rent, some new apartments are coming available which means you might have some more options, but don’t expect to see many great deals or incentives with all of the new people moving to Austin that will compete with you for those vacant units.
If you have any questions or need any help, please let me know!
Kyle Pfaffe, REALTOR KylePfaffe@kw.com 512-636-9707 www.AustinHomes4You.com