Austin Apartment Market Strengthens to End 2009

Austin Apartment Market Show Signs of Strength to Finish 2009

According to the Austin American Statesman and the Real Estate Center at Texas A&M (boo Aggies!), after two years of steady decline in occupancy rate and pricing in the Austin apartment market, the end of the 2009 saw improvement and 2010 looks to be a strong recovery year for the Austin market. The uptick in prices and occupancy can be partially attributed to the generally strong and steadily-recovering local economy, the fact that Austin has had fewer layoffs than most other major cities, and the general desirability of relocating to Austin. The fact that fewer buyers were purchasing new homes also leads more people to choose apartment living as an alternative, and this probably won’t change much into 2010, although the most recent data suggests that Austin actually had a massive year-over-year increase in home sales in December as well (over 57% according to the Austin Board of Realtors). The major takeaway from all of this: despite the fact that over 4000 apartments were added to the Austin market from June-December alone, more units were actually leased in that period than were built, which is a perfect example of the resiliency and singular nature of the Austin market for rental property and and even better reason to invest in multifamily property in Austin, TX!

According to Charles Heimsath, the president of Capitol Market research (a local real estate consulting firm), the occupancy rate was actually expected to decrease as a result of all the new units coming to market in the second half of 2009. He also thinks that “2010 is going to be a turnaround year for Austin” in which it is expected to regain many of the jobs lost during this most recent recession, and probably even surpass the pre-recession job totals. “I think that the job prospects are pretty solid for 2010,” he said, “and the economy is expected to gradually improve and regain significant strength by the end of the year.” The average rent for a two-bedroom, two-bath apartment in December was $942, virtually unchanged from the previous 5 months but down $20 from $962 at the end of 2008. Combined with the fact that Austin has also recently been named the #1 city to invest in commercial real estate in the entire United States, this news, and the generally positive news about late 2009 and the prospects for 2010, lead to only one conclusion: 2010 is an excellent time to invest in Austin. Prices are at a relative low, interest rates are also astonishingly low, and the tax credit has been extended for many home buyers - even if it’s not your first home you may still  be able to qualify!

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