The city saw in-migration of some 33,000 people last year, an increase of 3%, while unemployment was one of the lowest of any major metropolis--about 2.5%, according to economists. Some 30,000 jobs were added to the local economy, a magnet for workers in and out of the state.

Despite the economic boom, multifamily developers in Austin built only 4,500 apartments last year, creating one of the tightest rental housing markets in the Southwest, with an occupancy rate of nearly 98%. The result has been twofold: rents are on the rise as developers scramble to build new projects. There is little danger of overbuilding, say real estate analysts, who are keeping watch as developments come on line from such major players as JPI, Trammell Crow, Embrey, AMLI and Fairfield Properties.

An analysis by Austin Investor Interests, which monitors the multifamily market in the city, estimates some 5,000 apartment units were started in the first quarter of this year, another 6,000 currently are under construction and more are expected to come on line soon.