The white-hot housing market has coincided with a sharp rise in apartment occupancy since November. Even still, a new report by ApartmentData.com show there are plenty of units still available — many less expansive than a year ago — and several more apartment communities are about to come online.
So, while metro Austin’s apartment rental market is rebounding and approaching pre-pandemic numbers, landlords are still grappling with vacancies.
There was an operating supply of 254,074 apartment units spread across 1,075 communities in metro Austin in March, with an 89.3% occupancy rate, according to ApartmentData.com. The 10.7% vacancy rate last month was second-highest of the four Texas metros. Only Houston had a higher vacancy rate at 11.1%, with an operating supply of 688,427 units. The vacancy rate of Dallas-Fort Worth was at 9%, followed by 9.8% for San Antonio.
The ApartmentData.com report also stated 50 new apartment communities came online in metro Austin during the prior 12 months, adding 13,928 units to the market. Another 56 communities, with 15,862 units, are under construction. Developers have proposed an additional 107 communities, which would add 33,153 units.
It’s also typically more expensive to rent a unit in Austin than in Dallas-Fort Worth, Houston or San Antonio, according to the report.
The average rent for an apartment in metro Austin was $1,302 per month in March, the highest amongst Texas’s four major metros. Dallas-Fort Worth was next on the list, coming in at $1,193 per month. The average rent for an apartment in Houston was $1,055 per month.
San Antonio was the most affordable among the major Texas markets, with average rent of $1,003 per month.
But metro Austin actually saw the steepest decline in rent among the big Texas cities in the past 12 months, with a fall of 2.1%. Meanwhile, Houston rents fell 0.8% in that time.
Dallas-Fort Worth, by comparison, witnessed 1.3% rental rate growth during the same 12-month period. San Antonio was slightly higher, at 1.7% rent growth, according to ApartmentData.com.
Rents have been ticking back up in Austin for a few months. The average rent of $1,302 in March was up from about $1,250 per month in November.
And a severe shortage of single-family housing for sale could push more people into the rental market. The last Austin Board of Realtor report stated the metro’s housing inventory was at 0.4 months in February — a historic low for the Austin area and far below the six-month inventory that’s considered healthy.
Monthly rent for a metro Austin apartment peaked at nearly $1,325 per month in April 2019 and again in March 2020. Rents trended sharply downward since the start of the pandemic before hitting rock-bottom in November.
Occupancy also trended downward during the first eight months of the pandemic, despite metro Austin’s housing market trending upward in the same stretch.
A submarket combining downtown Austin, South Congress and Barton Springs experienced the hottest growth over the past three months, annualized occupancy growth of 40.9% and 2.4% of market absorbed.
Other hot submarkets, according to ApartmentData.com, were University of Texas/Mueller (24.1% annualized growth, 2.6% market absorption), “outlying metro” (16.5% annualized growth, 2.6% market absorption), Round Rock/Georgetown (14.9% annualized growth, 1.7% market absorption) and Cedar Park/Leander/Four Points (14.3% annualized growth, 1.8% market absorption).
Publication: Austin Business Journal