Austin Q3 Multifamily Market Report: Business Attraction Continues, Setting the Stage for Future Renter Demand
Highlights:
- The Austin multifamily market has held up reasonably well in 2020, although some of the effects of accelerating supply growth and the moderating pace of new demand began to emerge during the third quarter. Demand should gain momentum in the coming months, as Austin continues to attract technology leaders to the area.
- Apartment vacancy rose 20 basis points in the third quarter, finishing at 6.1 percent. Year over year, Austin’s vacancy rate is up 50 basis points.
- Local asking rents fell sharply in the third quarter, dipping 2.2 percent to $1,285 per month. After the quarterly decline, asking rents are 1 percent below the figure from 12 months earlier. Rents in Austin have recorded rapid growth during the past several years.
- The Austin investment market strengthened during the third quarter. Sales velocity accelerated, particularly within the city of Austin. Prices rose during the quarter, while cap rates have averaged 4.5 percent in 2020.
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