Rents Impacted By Strong Supply Gains
At the start of 2024, Austin’s multifamily fundamentals were unsteady, but overall, the state capital is well-equipped to overcome its challenges, according to the latest Yardi Matrix Austin multifamily market report. The biggest concern is supply, which is expected to further impact rent growth, with figures in negative territory since last July. The average asking rent decreased 0.7% on a trailing three-month basis through January, to $1,623, lagging the $1,710 U.S. average, as noted in the national multifamily report. The occupancy rate in stabilized properties also reflects the robust supply additions, decreasing 0.9% in the 12 months ending in January, to 93.0%.
Austin boasts a diversified and stable economy, with unemployment at 3.0% in December, above the national (3.7%) and state (4.0%) rates as well as all other major Texas metros, according to data from the Bureau of Labor Statistics. Additionally, in the 12 months ending in November, the employment market expanded 3.2%, or 36,800 jobs, 100 basis points above the U.S. rate. The professional and business services sector (13,400 jobs) continued to lead gains, followed by education and health services (8,700 jobs) and mining, logging and construction (8,100 jobs).
Developers delivered 14,600 units in 2023 and the pipeline remained robust, with 57,937 units under construction as of January. However, construction starts fell 35% in 2023. Meanwhile, transaction activity remained tepid. Just one sale was recorded at the start of the year—an RBN asset valued at $117,717 per unit.
Read the full Yardi Matrix Austin Multifamily Market Report: March 2024
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