The hot streak continues for the Austin-area apartment market, as rents and occupancies hit the highest levels in 21 years. According to real estate consultant and Capitol Market Research president Charles Heimsath, the area’s midyear apartment occupancy rate is up to 97.8 percent, the highest rate since he started surveying the market in 1991.
Because of the high apartment occupancy rate in Austin, rent prices are rising. Rent prices are up to a record average of $953 a month, up from the $900 a month average from June 2011. Experts say that although new apartments are under construction, demand continues to outpace supply.
Austin’s consistent job growth has made it an attractive market for job seekers and young people who are more likely to rent, which have been contributing factors in high apartment occupancy rate. The recent recession and its sequential financial implications resulted in many Austin apartment projects to become abandoned due to lack of financing. However, now that local economy has recovered many of these apartment projects, as well as new ones, are being reconsidered.
Research by Charles Heimsath shows that there are 10,604 apartment units currently under construction, which marks a huge increase from the 839 under construction in Jun 2011. Furthermore, there is an additional 8,800 units in the planning stages due to break ground in the coming years.
Greg Willett, vice president of research and analysis at MPF Research, feels that new apartment construction in Austin “will be among the most aggressive seen anywhere across the country during the next couple of years.”
Heimsath feels that the tight apartment market will continue throughout this year and spill well into the later parts of 2013, when many apartment projects will be nearing completion.
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