AUSTIN—The citywide vacancy rate has tightened to 9.7% in the Austin-area office market. “Things are really heating up,” says Doug McGregor, senior office consultant at REOC Austin.

The local office market has seen new leases and expansions generating 306,517 square feet of positive net absorption in the second quarter which raised the year-to-date total gain to nearly 636,000 square feet, according to the survey of more than 41.7 million square feet of Austin-area office lease space.

Last quarter, the vacancy rate stood at 10.5% and it was 12.3% in the same quarter a year ago. At the end of June, the citywide average quoted rental rate climbed to $26.32 per square foot per year—up $0.14 over the previous quarter and $1.52 compared to a year ago for an annual increase of more than 6%.