average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
individual transactions
QUARTERLY DEMAND
YTD: 10,203
QUARTERLY COMPLETIONS
YTD: 13,210
Average Monthly Mortgage Payment
Average Monthly Rent
In Q3 2023, the Austin rental market encountered varying occupancy rates amidst a rising inventory and shifting market conditions. Class A units showcased notable stability, achieving a commendable occupancy rate of 93.6%, despite a minor quarter-to-quarter decrease of 14 basis points. Interestingly, seven submarkets bucked the broader trend, witnessing improved occupancy—San Marcos led the charge with a 50-basis point quarter-over-quarter increase, reaching a rate of 93.9%. It was closely followed by Southeast Austin and Northwest Austin, each registering a 40-basis point uptick. This disparity underscores the significance of examining submarket-specific data to unveil localized trends and opportunities within the Austin area.
In the third quarter, Austin’s rental market experienced a sharp turn, registering an annual decline of 4.8%, bringing the average rent for new leases to $1,650 by the quarter’s end. While this downturn may seem startling, it primarily stems from an influx of new supply entering the market within a close timeframe, rather than a waning in demand. In fact, a closer examination unveils varied performance across different submarkets and asset classes within Austin. The Round Rock/Georgetown submarket witnessed a noteworthy increase in rent for Class A properties, with a substantial 5.0% annual rise in Q3 2023. Conversely, the Downtown/University submarket reaped the benefits of robust demand for Class B properties, propelling the annual rent growth to an impressive 5.7%, and elevating the average monthly rents in the submarket to a notable $2,666.
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| East Austin | 92.3% | -1.5% | $1,778 | -2.3% |
| Pflugerville/Wells Branch | 93.3% | -2.0% | $1,526 | -3.6% |
| Riverside | 91.9% | -3.4% | $1,568 | -2.6% |
| Far West Austin | 92.7% | -2.6% | $1,625 | -7.2% |
| Southeast Austin | 93.5% | -2.0% | $1,525 | -3.8% |
| Cedar Park | 93.9% | -1.1% | $1,611 | -7.5% |
| South Austin | 93.7% | -1.3% | $1,974 | -4.9% |
| Round Rock/Georgetown | 93.2% | -1.4% | $1,576 | -4.3% |
| Far South Austin | 93.6% | -1.5% | $1,566 | -5.6% |
| San Marcos | 93.8% | -2.3% | $1,439 | -0.2% |
| Austin-Round Rock, TX | 93.3% | -1.6% | $1,650 | -4.8% |
| Southwest Austin | 94.1% | -1.3% | $1,798 | -6.2% |
| North Central Austin | 93.9% | -1.1% | $1,547 | -2.9% |
| Arboretum | 93.2% | -2.1% | $1,478 | -7.9% |
| Downtown/University | 92.9% | -0.2% | $2,666 | -5.3% |
| Northwest Austin | 93.5% | -1.1% | $1,570 | -8.2% |
| Near North Austin | 93.3% | -1.3% | $1,650 | -4.8% |
Number of Units Under Construction
Number of Units UC Delivering In the Next 4 Quarters
At the end of September 2023, the total value of individual conventional multifamily transactions in Austin, TX, for the year amounted to approximately $1.8 billion, marking a 44.9% decline compared to the same period in the preceding year. Simultaneously, there was a 52% decrease in the number of properties traded, with 43 properties changing hands, indicating a cautious investment environment amid stringent financial conditions. Despite this downturn, Austin’s average price per unit experienced a notable annual rise of 9.0%, escalating to around $237,100. Institutional buyers remain the primary drivers of acquisitions thus far, and amidst fluctuating conditions, international buyers are maintaining steady interest, making up 5.4% of the buyer composition in the Austin market (a notable increase from the five-year average of 3.2%).
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
According to the latest economic, Austin’s job market is exhibiting remarkable vitality. By July 2023, 39,500 new roles had been generated from the same time last year, as per data from the Bureau of Labor Statistics (BLS). This reflects a substantial job growth rate of 3.1%. The region’s various sectors witnessed noteworthy employment surges, especially the professional and business services sector, which introduced 10,100 positions, equating to a 3.6% growth. Significantly, the leisure and hospitality sector emerged as the swiftest growing sector, burgeoning by 7.0% and contributing 9,800 fresh opportunities. Regarding unemployment, Austin paralleled the national average at 3.8% in July. This statistical panorama underscores Austin’s robust economic trajectory, marked by proliferating employment across diverse sectors and median wages that eclipse the national mean.
July Annual Jobs Created
July 23 Employment growth
July 23 Unemployment rate
3.8% us may rate
| Sector | Change from May 2022 to July 2023 | Percent Change |
|---|---|---|
| Professional and business services | 10,100 | 3.6% |
| Leisure and hospitality | 9,800 | 7.0% |
| Education and health services | 4,800 | 3.3% |
| Mining, logging, and construction | 3,900 | 4.8% |
| Trade, transportation, and utilities | 3,300 | 1.6% |
| Government | 2,600 | 1.4% |
| Manufacturing | 2,600 | 3.7% |
| Other services | 2,200 | 4.4% |
| Financial activities | 700 | 0.9% |
| Information | (500) | -0.9% |
Austin, TX presents a cost of living with an index score of 98.8, indicating a market that is more affordable than the national average. However, its housing market is somewhat less affordable, bearing a housing index of 106.3 and a median home sales price of $496,300. When juxtaposed with comparable tech hub, San Francisco, CA, Austin significantly undercuts costs in pivotal areas: housing is 62.0% less costly, and transportation expenses are reduced by 33.0%. This financial dynamic renders Austin an economically attractive destination for numerous individuals.
98.8
$3,713
106.3
90.1
85.6
$496,300
The “Cost of Living” index score provides a comparative assessment of the relative expense involved in maintaining a standard of living in a specific area, benchmarked against a national index score of 100.
Despite cooling in the past year, Austin’s multifamily market is witnessing a resurgence in demand. The city continues to showcase economic vigor, driven by a thriving job market and consistent growth. By the end of the third quarter, 42,804 housing units were in development, with 32,690 expected to be completed within a year. This surge may introduce temporary market challenges, yet the strong annual net absorption signals a resilient market. Particularly in East Austin, about 5,108 units are projected to be completed over the next 4 quarters. Even with potential market fluctuations, any impact on rent and occupancy is expected to be short-lived. Austin’s suburban growth, driven by accessibility, affordability, and job opportunities, plays a pivotal role in this resurgence. Ranking third nationally for units under construction relative to inventory, developers remain optimistic about Austin’s long-term prospects, gearing up for potential launches in 2024 and 2025.
