After several years of growth in rent, there are signs that Austin’s rental market is seeing a leveling off, Bisnow reports.
Austin did not make Abodo’s list of the the biggest increases in rent. New Orleans and Corpus Christi topped that list.
Austin’s increase in rent was more modest. Median rent in the city went up 2.6% between July and August to $1,154 for a one bedroom and $1,429 for a two bedroom. Austin’s median rent nabs it the 26th spot for the country, which is not bad compared to other cities.
August is historically a hot one for the apartment market because of a return of UT students to the city.
Abodo says that Austin’s rental market is on the cusp of switching from a market that favors landlords to one that favors renters. For a long time, landlords could set prices at almost whatever they wanted and still find renters. However, lots of multifamily construction has led to more modest increases in rent and landlords have to compete with what other apartments are renting at to find tenants.
Austin’s smaller size compared to other cities also works in favor of renters. Residents are willing and able to live just a bit further out and nab an apartment with more amenities and a better price than pay more just to be near downtown.
The slower growth doesn’t mean that rent is going to go down, it just hints at a stable multifamily market. A lot of companies are buying older apartment communities and making upgrades, but rent at those older communities is only slightly less than the brand new apartments. This leads newer apartments to not be able to charge as much as they would otherwise because at a certain point potential renters will just save money by going to a rehabbed older complex.
Abodo councils no one to expect Austin’s rent prices to drop anytime soon. As long as Austin is a desirable destination to live in, the cost of living will be higher.