The capital of Texas and home to the University of Texas at Austin, Austin is a moderately small city that enjoys a reputation for a pleasant, low-key lifestyle and strong job market. It has a population of approximately 2 million and is home to a number of Fortune 500 company headquarters and regional offices, including Advanced Micro Devices, Apple, Facebook, Whole Foods, Cisco, eBay, Google, IBM, Intel, Texas Instruments, and Dell. The city’s fine reputation and increasing job opportunities have led to dramatic growth in recent years.
Investing in Apartments in Austin: Market Outlook
Austin is one of four Texas cities whose metropolitan area topped the national growth chart in 2016. Austin saw a 2.9% growth in population, well ahead of the 0.7% national rate.
A June 2017 study by the National Multifamily Housing Council and National Apartment Association forecast that the number of apartments in Austin will increase by 114,000 by 2030, from its current level of 179,800 units.
As of mid-2017, the apartment market in Austin has ample supply and flattening rents, with Yardi predicting 1.1% growth in 2017. This comes after five straight years of exceptional local growth, averaging 5.8% annually. Construction activity remains brisk. Most notably, there are four residential towers going up in downtown Austin in the Rainey Street area. Despite the new supply in the market,the occupancy rate in Austin is still relatively strong at 94%.
In addition, Austin currently has some of the highest Class A rent and the lowest level of concessions.
Enthusiastic builders seem to be well advised in their actions. Occupancy has remained relatively steady throughout the construction boom. Research suggests that apartment housing is even in danger of falling short of demand by tens of thousands of units in the long term, as the city’s population grows (the study estimated growth of 44% from 2016 to 2030) and the tendency to rent simultaneously increase.
This bodes well for the Austin luxury apartments segment, as the city promises to add more tech jobs and attract retirees who live in apartments as a lifestyle choice rather than out of economic necessity.
Real Estate Investment and Property Management in Austin
In spite of some growing pains, the future looks bright for Austin and its multifamily housing market. In 2017, the Austin multifamily real estate market cooled a bit with a wave of new supply that was delivered, which has currently outpaced the absorption rate. Even so, Austin is poised for long-term growth given its desirability amongst current residents and future residents and corporations looking to relocate and/or expand in a pro-business environment.
With 21 properties in Austin, CWS Capital Partners is a leader in investment and property management in the city. As experts in multifamily properties in Austin, we can guide you through the investment process, whether that is an acquisition of an existing property, repositioning, development, or a 1031 exchange. To learn more about our Austin properties, please visit our affiliated CWS Apartment Homes website or contact us today to begin investing in multifamily real estate in Austin today.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
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