The third quarter was a mixed one for multifamily operators in Austin, with supply down significantly, but many fundamentals still lagging.
Rents, for one, continued to decline, averaging $1,441 in the third quarter, down from the $1,524 posted a year ago, a market analysis from Colliers reveals.
"Average overall asking rents have dropped for the ninth consecutive quarter," the brokerage further noted.
Additionally, demand for multifamily in Austin was just a fraction of the 9,044 units posted 12 months ago, at 2,593. A few submarkets experienced negative absorption, led by Arboretum and North Central Austin, which posted -211 and -64 units, respectively.
But there were some encouraging signs, with the outlook for future quarters boding well almost everywhere across the board. Occupancy increased by 90 basis points to 93.5 percent.
Supply trends are another important element. Deliveries fell significantly to 4,022 units, from 9,564, while construction tumbled to 17,967 units compared with 32,435 units. The construction trend is expected to continue, with the third quarter of 2026 expected to see just 8,052 units underway, Colliers predicts. However, deliveries are projected to pick up steam again and hit 11,801 units in a year from now.
That will all come as occupancy is set to improve further to 95.3 percent, with net absorption surging to 17,461 square feet and rents going up modestly to $1,457, according to Colliers.
"The pace of new construction is easing as developers respond to changing market signals," it said.
"Looking ahead, the market is expected to regain equilibrium as supply growth slows to meet current demand."
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