"Austin has one of the fastest-growing apartment markets in the country," said Greg Willett, director of research products for M/PF. "Most of them were started when the economy was booming. It was poor timing as far as the construction cycle goes."
Not long ago, Austin was booming along with the rest of the high-tech economy. But during the 12 months ending in May, some 6,000 jobs evaporated in Austin, according to the federal Bureau of Labor Statistics. That said, employers are starting to hire back some of the employees they laid off, according to the M/PF report.
Some 9,700 units have been delivered over the past year, about 7% of Austin's overall apartment rental market of 141,499 units, according to Willett. "Anytime you get more than 2% to 3% a year is pretty aggressive," he said.
Nor are things aren't easing up--the market is expected to grow by an additional 8% over the next year, according to Willett. There are more than 10,100 apartment units expected to be delivered over the next 12 months.
Many of the new projects are in northern suburbs, where many of the once high-flying, high-technology firms have crashed, Willett said. Rental concessions in those submarkets ranged from 8.8% to 10.9%, he said.
Apartment occupancy in metro Austin is expected to drop 1.2 points over the next 12 months ending in June, dropping to 90.6%, according to M/PF. A year ago, the occupancy stood at 94.1%.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
