Austin may be known for SxSW and tasty BBQ, but multifamily may be its next claim to fame. It delivered 1,143 units in Q1, which was the sixth most of any MSA across the country, says Axiometrics VP Jay Denton. Despite the ramp-up, Austin continued to outperform the national average rent growth rate in March and there's plenty of demand for the new supply. Austins annual effective rent growth rate of 4.7% is down from 6.8% last March but still strong by historical standards. 7,307 units are scheduled to deliver this year. (Though most will be filled by people in town for SxSW, which now lasts for 51 weeks.)
On the investment side, ARA Central Texas founding principal Pat Jones says there isn't a lot of product for sale in Austin because owners are seeing operating income go up each month and interest rates stay low. People are inno hurry to sell despite excellent buyer interest, and apartments are in short supply because of record job growth and in-migration, he says. New development is running to catch up. The majority of the new construction is urban infill, focused in and around the CBD. Submarkets like Southwest, West, Cedar Park, and Round Rock are seeing minimal construction despite the fast-growing corporate presence of Apple, Samsung, 3M, and National Instruments. (Maybe Apple could launch iApartments.)