Austin’s apartment market has been feeling the effects of supply pressures, resulting in a cooling trend. The vacancy rate has increased by 80 basis points between the second and third quarters, reaching a current rate of 15.3%. This is the highest vacancy rate seen in over ten years according to Matthews Real Estate Services. In fact, Austin has held onto its position as having the highest multifamily vacancy rate in the nation for several months.
The surge in available units is primarily responsible for this rise in vacancies and decrease in rental prices. However, despite these challenges, Austin’s strong economy will help mitigate some of these impacts. The city’s thriving technology industry continues to attract new residents and create job opportunities throughout this decade.
While recent declines have brought rents down by nearly 5%, they are still on average 10% higher than they were back in 2019 – highlighting just how quickly rent growth occurred during that time period.
Fortunately, with construction activity expected to slow down significantly between now and mid-2020s , we can expect vacancy rates to stabilize soon enough . This could potentially allow for positive rent growth next year.
