Austin's Robust Job Market Driving Up Rental Rates

AUSTIN-The explosive increase in jobs here, approximately 24,000 positions during the last year (a growth rate of 3.5%), is the major factor that has driven the vacancy rate for apartments to 4.4%, the lowest in Texas. Over the next year, 25,000 new jobs are forecast for the area, which translates into one new unit for every three new positions. These figures are released in “Apartment Research Report” for Austin issued by Marcus & Millichap Real Estate Investment Brokerage Co.

Other factors driving the demand for rentals are the median price of homes, $126,500, and rising interest rates. That’s why it’s no surprise that during the first six months of this year construction began on 24 projects that will deliver a little over 7,000 units. In all of 1999, only 6,114 apartments came to market. At the moment, approximately 2,400 additional units have been approved by the city and over 6,100 are awaiting approval, but even that will not satisfy demand, according to the report.

Austin has the most expensive rents in the state, averaging $704 per month, an increase of 8% over the last years versus 6% the year before. Dallas/Forth Worth and Houston rents average $652 and $558, respectively. Austin apartment rents are projected to rise 6% next year.