Austin Multifamily Market Still Looks Good, But Less So Than Last Year
Job growth in Texas' weirdest city still looks better than the national average, but it's considerably lower than this time last year and the impact can be seen in multifamily demand.
Austin rent growth for October stands at 2%, the lowest growth rate in more than six years.
The Austin economy added about 67% more jobs from September 2014 to 2015 compared to the same period 2015-2016. Nearly 29,000 jobs were added from September 2015 to 2016, according to the Bureau of Labor Statistics.
But Axiometrics real estate analyst Nick Fitzpatrick says job growth tells only part of the story—supply plays a big factor, too.
Nearly 3,000 units delivered in Q3 and Axiometrics is predicting about 11,000 more by the end of 2017.
Nick tells us he thought the market would slow down a lot earlier than it did. That 5% and 6% annual effective rent growth Austin has seen for the last couple of years is gone, but Nick says demand is still strong, and supply is just peaking.
Axiometrics predicts that after a correction through 2017, supply will slow down in 2018 and 2019.
The average one-bedroom rent in Austin now stands at $1,203 with an annual effective rent growth at 2%. Rent growth in October 2015 was just more than 5%. Occupancy fell .6% to 94.5%.
Suburban and submarkets outside the CBD still look promising. Rent in Travis County East, Far North Central, Far Northwest, Round Rock/Georgetown and San Marcos grew the most compared to all other Austin submarkets.