For market watchers in Austin and Central Texas this trend has been visible, but the Austin American-Statesman made it public information over the weekend:
Average apartment occupancy is back to pre-recession levels in the Austin area, pushing rental prices to all-time hights, and that is adding strength to lease rates for other types of residential property as well:
AMLI Residential CEO Gregory Mutz said, “There are a number of positive forces at work — job growth, household formations, positive demographic trends, a greater propensity to rent versus buy, and the fact that there are currently very few new apartment units being delivered as new supply this year.”
I still see plenty of demand for home purchases rather than leasing, but if a job brings a family to Austin who is unable to sell their home elsewhere, then renting here is usually the first alternative. In addition, there is no doubt that some people remain nervous about what they have read and heard about home ownership over the past few years. Those factors, and a continuing shortage of new rental properties, will keep this supply-demand situation working in favor of landlords for some time to come.
As always, some hyperlocal market segments are feeling this strength while others are not. Indeed, some neighborhoods remain extremely difficult to lease due to a variety of factors. Where to invest in Austin real estate?, posted a few days ago, summarized investment potential in different parts of Austin. Since I rarely work with apartments I focused that analysis on single family rental properties, but the comparative strength and weakness of those MLS regions is valid.
Thinking of investing in Austin and Central Texas? This is good news. You still need to make informed decisions about location, and be clear about your investment objectives, but there is still time in this market cycle to get on board.