Austin Q3 Multifamily Market Report: Employment on an Upswing, Fueling Rental Market
Highlights:
- The Austin multifamily market is benefitting from a return to the rapid growth that the region has been known for over the past decade. Vacancies are dropping and rents are on the rise. The strength of the market is reflected in price and cap rate trends.
- After trending higher at the end of 2020 and the beginning of 2021, vacancy has tightened. The rate dropped 120 basis points during the third quarter, reaching 5.7 percent. This marked the lowest vacancy rate in the Austin area in two years.
- Rents spiked 4.6 percent in just the three months of the third quarter. Asking rents ended the period at $1,370 per month, up 6.6 percent from one year earlier. With economic growth gaining momentum and vacancy tightening, additional gains are likely.
- The number of properties that sold in the third quarter lagged levels from the prior period, but sales activity to this point in 2021 has more than doubled 2020 levels. Prices are on the rise, reaching $205,800 per unit, while cap rates have compressed to about 4 percent.
