The final year 2000 count shows 5,650 units had been delivered, with 2,215 of those coming to market in the fourth quarter. Previous quarterly completions had averaged less than 900 units. But, relief could come this year since there are 10,600 units now under construction in metropolitan Austin.
Annual statistics show delivery can barely keep pace with demand, with annual needs riding at just 150 units below what's come to market. The workers filling the region's new 29,100 jobs and high mortgage interest rates are driving a fast-paced building spree, the likes of which have pushed rents to an all-time high of $805.
"Austin's apartment market has been a standout performer nationally during the past 12 to 18 months," says M/PF Research editorial director Greg Willett. "Developers responded to the metro's impressive occupancy and rent growth with increased construction starts."
There has been a 1.1% decline in the 98% occupancy that had been recorded in fourth quarter 2000, just prior to the delivery surge. "A few months ago every sector of Austin posted occupancy of at least 98%," explains Willett. "Current occupancy still tops 98% in the Intown area, but most other parts of the city record occupancy in the 96 to 97% range." Despite the completions, occupancy is the identical to that recorded for the same period in 1999, says M/PF.
Rents are now 9.9% higher than a year ago. The M/PF Research survey measures rent growth based on performances reported at the same properties in December 1999 and December 2000, and thus eliminates shifts that result simply from variation in sampling. M/PF says Austin's rent growth is keeping pace with the likes of the San Francisco Bay/Silicon Valley region, Boston, Washington, D.C. area and parts of Southern California.
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