Austin Texas Real Estate Blog

The saturation of rental units on the Austin market is good news for tenants who can expect cuts in rent and possibly pick up some amenities as landlords vie for their attention. Yet, the demand remains high for upscale urban apartments as people look for residential units closer to their place of employ.

According to the apartment research firm, M/PF YieldStar, occupancy for June 2008 stood at 93.4 percent, down 1.5 percent from March and nearly 2 percent from the same time in 2007. This should raise some concerns with landlords, as the same firm predicts a flattening of occupancy for the rest of 2008, and foresees a drop of possibly 3 percent in 2009.

Construction of nearly 13,000 units is planned for the Austin area through 2009. Greg Willett, vice president of research for M/PF, says the real need is for about half that amount, based on demand which he feels has become sluggish.

This pessimistic opinion is not shared by developers in the Austin market, however. Spencer Stuart, managing director of Legacy Partners Residential Development Inc., says rental activity is strong in both downtown and close by suburban areas. Rising gas prices and the desire to be close to the action is fueling the demand for higher priced units closer in to the city.

Still, the rise in rental rates does appear to be slowing down and tenants will indeed find bargain lease rates. Rents rose less than 4 percent from 2007 to 2008, with average monthly rent standing at $839. Yet, this means the market becomes more competitive, and that means good deals for prospective tenants.

The old saying “April showers bring May flowers” is very true when it comes to the real estate market. Buyers seems to go underground at the first hint of cold weather and emerge, like so many Punxsutawney Petes as the ground and air thaws and the weather is more friendly toward house hunting activities.

According to this article in the Realty Times, the housing market in the nation as a whole is beginning to shake off the winter doldrums, as well as the residue of a burst real estate bubble, and starting to show a positive trend once again.

Austin is right up there with the fastest-selling inventories – houses average 67 days on the market.

Prices are beginning to rise slowly, indicating a healthy seller’s market, but also a good buyer’s market as inventory is still somewhat high and buyers have their choice of properties at still reasonable prices.

In its continued penchant to buck against national trends, average sales prices of homes in the Austin area rose almost 2 percent in April, with prices up about 12.5 percent over 2007. Average price of a home in Austin stands at just under $267,000.

Another event that is having a huge effect on the real estate market trend is the drastic rise in gasoline prices. This has had the social effect of potential home buyers considering what a commute would mean to their pocketbooks as they look at the choices between rural and urban home locations. Many energy-conscious consumers are beginning to cast an eye toward home-owning possibilities in the downtown area. A number of luxury apartment and condominium projects are underway in downtown Austin, and prospective homeowners are eagerly awaiting completion of these projects as they look toward a more urban and energy-efficient lifestyle.