AUSTIN, TX—Average Austin apartment rents increased in August for the eighth straight month, but annual effective rent growth continued its downward trend, according to Axiometrics, the apartment and student housing market number cruncher. This points to a gradual slowdown that was anticipated to begin in 2014 but is now just evolving.
“The market was supposed to slow down in 2014, but only just got the message,” Jay Denton, senior vice president of analytics for Axiometrics, tells GlobeSt.com. “Austin received a large amount of new supply early on this cycle, but continued to see robust growth well beyond initial expectations. Only now are we beginning to see a slowdown to more moderate growth levels.”
Austin employers added 37,800 jobs in the 12 months ending in July, which translates to 3.9% job growth, more than 2 full percentage points higher than the national rate. Some 9,740 new units are expected to come to market this year–the busiest of the current apartment cycle–and another 6,862 are identified for 2017 completion. A shortage of construction labor is forcing several new properties scheduled for completion this year into next year's column.
“Negative rent growth in the Central submarket is bringing down Austin's overall rate,” said Stephanie McCleskey, vice president of research for Axiometrics. “Job growth is still booming, but the amount of new supply coming to market is a little too much for the demand, specifically in concentrated areas.”
In researching the Austin-Round Rock Metropolitan Statistical Area as compared to the national market in August, Axiometrics reported occupancy at a healthy 95.4%, average rent of $1,214 and average effective rent growth of 2.7%. The rolling two-year data for Austin signal steady occupancy but moderating annual effective rent growth. Of the 17 Austin submarkets with more than 1,000 units, the following areas comprise the top five for annual effective rent growth in August 2016: Far North Central at 6.6%, Round Rock/Georgetown at 6.4%, Near North Central at 5.3%, North Travis at 4.8% and Far Northwest at 4.2%.
In contrast, the national average rent was slightly higher at $1,293 with annual effective rent growth of 2.9% and occupancy fairly similar at 95.2%.
AUSTIN, TX—Average Austin apartment rents increased in August for the eighth straight month, but annual effective rent growth continued its downward trend, according to Axiometrics, the apartment and student housing market number cruncher. This points to a gradual slowdown that was anticipated to begin in 2014 but is now just evolving.
“The market was supposed to slow down in 2014, but only just got the message,” Jay Denton, senior vice president of analytics for Axiometrics, tells GlobeSt.com. “Austin received a large amount of new supply early on this cycle, but continued to see robust growth well beyond initial expectations. Only now are we beginning to see a slowdown to more moderate growth levels.”
Austin employers added 37,800 jobs in the 12 months ending in July, which translates to 3.9% job growth, more than 2 full percentage points higher than the national rate. Some 9,740 new units are expected to come to market this year–the busiest of the current apartment cycle–and another 6,862 are identified for 2017 completion. A shortage of construction labor is forcing several new properties scheduled for completion this year into next year's column.
“Negative rent growth in the Central submarket is bringing down Austin's overall rate,” said Stephanie McCleskey, vice president of research for Axiometrics. “Job growth is still booming, but the amount of new supply coming to market is a little too much for the demand, specifically in concentrated areas.”
In researching the Austin-Round Rock Metropolitan Statistical Area as compared to the national market in August, Axiometrics reported occupancy at a healthy 95.4%, average rent of $1,214 and average effective rent growth of 2.7%. The rolling two-year data for Austin signal steady occupancy but moderating annual effective rent growth. Of the 17 Austin submarkets with more than 1,000 units, the following areas comprise the top five for annual effective rent growth in August 2016: Far North Central at 6.6%, Round Rock/Georgetown at 6.4%, Near North Central at 5.3%, North Travis at 4.8% and Far Northwest at 4.2%.
In contrast, the national average rent was slightly higher at $1,293 with annual effective rent growth of 2.9% and occupancy fairly similar at 95.2%.
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