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Concessions, Rent and Vacancy Rate Rise

AUSTIN-Hendricks & Partners latest multifamily report is reflecting increases in rent and vacancy as concessions are now firmly planted in 42% of the class-A market. Meanwhile, more units are being delivered despite a dip in demand in most Austin-area markets.

By Tim Green | Updated on June 22, 2001

AUSTIN-The city’s apartment vacancy rate has increased in the first quarter as developers put more units on the market and lower interest rates attract first-time homebuyers.

The Q1 vacancy rate stood at 2.9%, up from 2.2% in the 2000 first quarter, according to a study released by Phoenix-based Hendricks & Partners, a national multifamily advisory firm. That simple number has reverberated throughout the market, decreasing absorption and increasing concessions. Rents, however, have spiked for the last 12 months, ending March 31.

Developers have added 2,575 apartments in the first three months of this year, up from 2,348 for the same period in 2000. And another 8,000 are expected to be completed by yearend. Demand didn’t keep up with the new construction in the first quarter, falling to 1,876 units from an absorption of 2,498 units in the 2000 first quarter.

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