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Multifamily Remains Down Yet Building Goes Up

AUSTIN-The latest Hendricks & Partners multifamily report says 75% of all Austin-area properties are offering concessions, including 95% of the class A lineup. Sales are down, absorption is down and construction...well, it's rising.

By Tim Green | Updated on June 09, 2002

AUSTIN-The human chain reaction continues to reverberate through Austin’s commercial real estate market. First, companies laid off workers, which led to higher office vacancy rates. That, in turn, has led to fewer residents for Austin’s apartments.

An apartment market survey from Phoenix-based Hendricks & Partners says Austin’s multifamily is suffering from decreased demand as “laid off workers double up or leave the area in search of new jobs.” Austin had a negative 1.7% job growth rate in the first quarter, a loss of about 11,900 jobs.

Job losses translate to an 8.2% vacancy rate, up from 2.9% in Q1 2001. Also, the average rent increased just 0.4% to $729 per month in comparison to a 9.4% increase in the 2001 first quarter to $726 per month. On a quarter-to-quarter basis, the average rent dropped 0.3% from fourth quarter 2001. Hendricks’ researchers say 75% of all properties are offering concessions, including 95% of the class A properties.

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