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AUSTIN (Austin Business Journal) -- Multifamily housing development in the Austin area is on fire.
Roughly 18,000 multifamily units were built during the first nine months of 2023, according to commercial real estate firm Partners. In the third quarter alone, production nearly doubled compared with the same period in 2022, from 3,996 to 7,508 units built. But that huge increase in supply has led to a decline in occupancy rates, which fell to roughly 89% in the third quarter from 92% in the year-ago period, Partners reported.
The increase in supply in the Austin area mirrors national trends, with markets from coast-to-coast becoming less competitive because of a record amount of new apartments and rental units delivered. That trend is expected to continue into 2024 and could mean slower growth in rental rates or even cuts.
And as of November, the Austin-Round Rock metro area ranked No. 2 in the nation for percentage declines in rental rates, with a year-over-year decrease of about 6%, according to RealPage Inc. data. The average monthly asking rent in Austin in the third quarter of 2023 was $1,608, down from $1,653 in the second quarter.
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