Apartment demand cooled considerably in Austin last year, leaving multifamily landlords with no choice but to lower rents.
Average monthly rent plummeted by 12.5 percent year-over-year in December, marking the second-largest yearly decline among major U.S. metros, the Austin American-Statesman reported, citing a study by Rent.com.
The average fell to $1,985 in December, down from $2,270 in December 2023. That decline was surpassed only by Salt Lake City, where rents nosedived by almost 21 percent.
Austin had the lowest occupancy among 12 Sunbelt markets tracked by MRI ApartmentData, standing at 86 percent in January. This oversupply led to steadily decreasing rents since Austin’s multifamily boom peaked around summer 2022.
“It becomes apparent that Austin’s low overall occupancy is a function of its large number of new units delivered (26,718) in relation to units [leased],” MRI’s Bruce McClenny wrote. “Also, Austin’s number of deliveries rivals that of Houston (27,252), a metro that is almost two and a half times larger than the size of Austin.”
Market conditions stand in stark contrast to the rapid growth and soaring rental prices seen in previous years, fueled by Austin’s booming tech sector and inbound migration during the pandemic. Experts predict that the oversupply will continue to drive rent declines, offering renters ample negotiating power, the outlet said.
Alvino Rosales, senior district sales manager for Rent.com’s Austin area, advised renters to capitalize on the favorable conditions, emphasizing that it’s a renters’ market with numerous deals and opportunities available. With an abundance of apartment options at reduced costs and generous concessions from landlords, tenants are urged to conduct thorough research to secure advantageous deals.