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The Crossland Team
Sylvia Crossland, Broker Steve Crossland, MPM (512) 301-5811 |
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Austin Rental Market Update – March 2009
April 28, 2009
Average rents in Austin have taken a slight dip for the first quarter of 2009. The number of rented homes is up 11% over the same three months a year ago, no doubt due to the fact that many sellers are opting to rent instead of dropping prices below their bottom dollar. This creates additional rental inventory, which gives renters more homes to choose from, and prevents prices from increasing.
Personally, I’ve leased 4 or 5 homes in the past 2 months, and the market is really spotty. One house I leased central received 4 applications in 2 days. Another one I leased north central leased immediately for $1,650 a year ago, but took about 45 days to lease for $1,595 this year. Another one in Western Oaks leased for $1,550 (same amount as last year) in about a week. A different home in Western Oaks, also listed at $1,550, and newer and in better condition, has not received any showings in more than a week. It’s not an easy market to predict right now, much like the sales market.
The stats chart is below, followed by the 1999-2009 Austin leasing history graph.
| Austin Real Estate Rental Market Update Q1 2009 Jan-Mar | ||||
| Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data | ||||
| Oct-Dec 2008 | Jan-Mar 2009 | Jan-Mar 2008 | Yr % Change | |
| # Rented | 1878 | 1979 | 1782 | 11.05% |
| Avg List | $1,407 | $1,382 | $1,393 | -0.79% |
| Med List | $1,250 | $1,225 | $1,250 | -2.00% |
| Avg Rent | $1,390 | $1,364 | $1,384 | -1.45% |
| Med Rent | $1,225 | $1,200 | $1,225 | -2.04% |
| Rent/List % | 98.79% | 98.70% | 99.35% | -0.66% |
| Avg SQFT | 1934 | 1930 | 1919 | 0.57% |
| Med SQFT | 1794 | 1798 | 1799 | -0.06% |
| Avg $ SQFT | $0.72 | $0.71 | $0.72 | -2.01% |
| Avg DOM | 42 | 50 | 41 | 21.95% |
| Median DOM | 33 | 40 | 29 | 37.93% |
| # Expired | 293 | 206 | 183 | 12.57% |
| # Withdrawn | 513 | 458 | 350 | 30.86% |
| Not Rented | 806 | 664 | 533 | 24.58% |
| Not Rented % | 30.03% | 25.12% | 23.02% | 9.12% |
As noted in the chart above, average rents in Austin (for single family homes) are $1,364/mo., down 1.45% from $1,384/mo. the same quarter 2008. Median price has fallen from $1,225 a year ago to $1,200 this year, meaning half of all homes in Austin rented for $1200 or less.
Below is a graphical representation of the Austin rental market from 1999 through March 2009.
Austin Rental Market Update for 2008
January 23, 2009
The rental market for single family homes in Austin continues its march upward. Rent prices increased about 6% in 2008 over 2007. Remember though that the 2008 average rent amount of $1,424 per month in Austin is still less than the year 2000 average rent of $1,497/mo. and the year 2001 peak of $1,524/mo. The graph below shows the historic average and median rent values for Austin from 1999 through 2008. The big dip you see in the chart is a result of the tech bust, 9/11 and the resulting job losses, weak economy and over-supply of rental homes that resulted in all the failed sales efforts from 2002 through 2004. You can see that our rental market bottomed out in 2005 and turned upward in 2006 and has continued that trend for three years now. But most rental homes in Austin still rent for less than they did in 2000 and 2001, so renters have had a good run.
Will the Austin rental market continue its upward climb in 2009? It’s hard to know for sure, but I think it might level off a bit for 2009. Demand for rental homes will increase due to the non-buyers who are choosing to not buy a home and instead becoming or remaining renters. But that is offset by the slower job market, and the increased rental supply provided by sales listings converted to rentals after not selling, as those sellers refuse to lower the price further and instead decide to simply hold off on selling for a year or two until the sales market rebounds. Also, although the rental stats look really good for landlords, those of us in the business of renting properties know that we are not always able to increase rents and not all homes rent as quickly as the stats suggest.
Finally, apartments are over-built again in Austin and there will be a large number of just completed new apartment units coming online in Austin in 2009, as well as new condos converted to rentals due to slow sales. The move-in deals and concessions offered by apartments tend to siphon away at least some of our home renters who ordinarily might not consider an apartment but can be swayed by economic incentives such as three month’s free rent, $99 deposits and free washer and dryer. So, while demand will increase, supply will be increasing by even more.
I just mailed lease renewal notices out for 4 rental properties I manage, and we did not raise rent on any of those particular properties. It’s much cheaper and more prudent to retain a tenant at the current rental rate than to cause them to think about moving because of a $50 or $100/mo rent increase.
December rental stats, Year to date rental stats, and a breakdown comparing 2008 to 2007 by MLS area are all posted below.
Austin Rental Market Update – Oct 2008
November 19, 2008
At my monthly Property Manager’s luncheon yesterday in Austin, the general consensus among the 30+ property managers in attendence was that the leasing market has taken a nose dive since September. The number of renter calls has really slowed down. One manager remarked “I keep calling my own phone to make sure it’s working”.
Indeed, the Rental market seems to have slowed down, but the market stats don’t make that obvious. You’ll just have to take my word on it. So treat this prelude to the stats report as an asterik, noting that some homes are in fact leasing slower and for less money than a year ago, even if the general overall stats for October seem to be as good or better than a year ago.
So, let’s take a look at the October stats below, and notice that the average rents in Austin are up 3% over October last year. Median rents are the same, which is common for rentals, as the median doesn’t move often. Days on market look good at 31 average and 23 median. The average and median prices per square foot , however, are down. This is more in line with what the leasing agents and other property managers are reporting. The number of expired lease listings is up and the number of withdrawn listings has more than doubled from a year ago. See the chart below.
| Austin Real Estate Rental Market Update | ||||
| Homes only (condos, duplexes, etc. not included) compiled from Austin MLS data | ||||
| Sept 2008 | Oct 2008 | Oct 2007 | Yr % Change | |
| # Rented | 595 | 661 | 585 | 12.99% |
| Avg List | $1,429 | $1,396 | $1,355 | 3.03% |
| Med List | $1,250 | $1,250 | $1,250 | 0.00% |
| Avg Rent | $1,412 | $1,383 | $1,339 | 3.29% |
| Med Rent | $1,250 | $1,245 | $1,245 | 0.00% |
| Rent/List % | 98.81% | 99.07% | 98.82% | 0.25% |
| Avg SQFT | 1917 | 1890 | 1926 | -1.87% |
| Med SQFT | 1800 | 1745 | 1827 | -4.49% |
| Avg $ SQFT | $0.74 | $0.73 | $0.70 | 5.25% |
| Avg DOM | 32 | 38 | 31 | 22.58% |
| Median DOM | 27 | 29 | 23 | 26.09% |
| # Expired | 88 | 80 | 62 | 29.03% |
| # Withdrawn | 131 | 178 | 81 | 119.75% |
| Not Rented | 219 | 258 | 143 | 80.42% |
| Not Rented % | 26.90% | 28.07% | 19.64% | 42.92% |
So in a market in which the phones are not ringing and inventory is building (from failed For Sale properties being converted to rentals), price drops and incentives are the only cure (assuming there are no condition issues). I had a house listed at $1,395 with ZERO showings for 1 month. We dropped it to $1,275 (for the first 6 months), which represents a $720 rent incentive, and it leased immediately thereafter. That $720 is equivilent to 16 days of vacancy at $1395, so as we approach the current tenant’s move-out date at the end of November, we had to get more agressive.
Below are the year to date leasing stats for Austin 2008 through October compared to 2007 Oct YTD.
Read more
Austin Rental Market Update – July 2008
August 23, 2008
The Austin TX rental market continues to do well overall. Rents are steadily rising for the third year in a row after falling for 4 straight years (2002 through 2005). Average rents for homes in Austin for July 2008 were $1,493 per month. Year to date the average rent is $1,425. the graph below shows nearly the past 10 years of Austin’s rental market and our ups and downs.
The rental market is helped now by the fact that fewer renters can qualify to purchase homes, which increases demand. The easy loans that renters were able to obtain from 2002 through 2007 are gone. You need a down payment and decent credit to buy a home now, as it should be.
The chart above shows the past decade of the ups and downs in Austin’s rental market. Despite three years of gains, the average and median rents are still lower than they were in 2000. Yes, that’s right, rents are lower still today than they were 8 years ago. Austin renters have had a great ride, while landlords have been nailed with higher property taxes, insurance costs and repair costs.
I just rented a home I own for $1,225 after an extensive remodel. I rented the same home, in average condition, for $1,325 in 2001. Rents are still very specific to location, price range and condition. We just rented a luxury home for $2,295 that rented for $2,495 a year ago. We simply did not have the number of showings needed to fetch the higher rent this time, and we disallowed large dogs.
Below are July rental stats chart and the year to date stats chart. I’ve added some color formatting to the charts this time. Green fields indicate numbers that are moving in a direction positive for landlords.
Read more
Austin Rental Market Update – March 2008 and YTD
April 20, 2008
Homes in Austin are renting for 8% more than last year, on average. Average rent price for homes across the Austin Metro area was $1401 per month for March 2008 compared to $1295/mo the year before. The Median leased price remained about the same at $1200. Homes are renting fast this March. The average days on market was down to 37 days from 42 last year. The Median days on market was 26 compared to 28 days last year, which means half of the rental homes in Austin that leased through the Austin MLS rented in 26 days or less, and half took more than 26 days to rent.
The average rental price per sqaure foot is up almost 6% to $0.73 compared to $0.69 last year. The average size rental home in Austin was 1915 sqft and the median size was 1794 square feet.
The number of homes rented was down about 10%. More renters are renewing leases as fewer can qualify for home purchases than in the past several years. This is good for landlords. Note that our average rental rate of $1401/mo for March 2008 is still lower that the average of $1497/mo that renters paid in the year 2000 and the $1524/mo renters paid in 2001 before Austin rents tumbled for four years and bottomed out at $1235/mo in 2005. So we’re still trying to climb back to where we were 6 or 7 years ago.
Below is the data chart for March Rentals in Austin. Further below is a year to date chart, breakdown by city, and a historical graph of rental rates in Austin from 1999 through the end of March 2008. As usual, comments and questions are welcome.
|
Feb 2008 |
Mar 2008 |
Mar 2007 |
Yr % Change
|
|
| # Leased | 563 | 594 | 659 | -9.86% |
| Avg List Price | $1,370 | $1,412 | $1,305 | 8.20% |
| Median List Price | $1,200 | $1,250 | $1,200 | 4.17% |
| Avg Leased Price | $1,362 | $1,401 | $1,295 | 8.19% |
| Med Leased Price | $1,200 | $1,200 | $1,195 | 0.42% |
| Avg Size SQFT | 1901 | 1915 | 1874 | 2.19% |
| Median SQFT | 1755 | 1794 | 1769 | 1.41% |
| Avg $ per SQFT | $0.72 | $0.73 | $0.69 | 5.87% |
| Avg Days on Mkt | 39 | 37 | 42 | -11.90% |
| Median Days on Mkt | 27 | 26 | 28 | -7.14% |
Below is the Year to Date Comparison chart.
Read more
Austin Rental Market Update – 2007-2006 Comparison
March 13, 2008
For 2007, the Austin Rental Market continued to see gains in average and median rental rates for single family homes. But we still lag behind the rental rates landlords enjoyed 6 and 7 years earlier, if you can believe that. The graph below shows where we were in 1999 through 2007. You can see the huge 4-year plunge rental rates took from 2001 until we started back up in 2006 and 2007.
The average rental rate for a single family home in Austin during 2007 was $1344 per month, up 7% from $1256 in 2006. The average sized rental home was 1883 square feet. The median rental rate for 2007 was $1200, up 4.3% from $1150 in 2006. The average rental price per square foot was up 4.4% to $0.71 in 2007. Average days on market improved to 45 days from 54 days in 2006. And median days on market fell to 33 days in 2007 from 43 days in 2006.
All said, another good year heading in the right direction for Austin landlords. See the graph below.
Below is a chart breaking down the 2007/2006 metrics.
Read more
Austin Rental Market Update – thru Oct 2007
November 24, 2007
The Austin Rental Market keeps chugging along. Not much new to say for the stats report this month as the steady climb in rents continues. Average rental rate is up 5.7% from a year ago, to $1354 (though down from last month due to our seasonal shift). But remember, average rents in Austin are still not yet back to the year 2000 rates. Stats are below. I did a breakout this month by city just to include something new. As usual, questions and comments are welcome. Sales stats will be coming next.
|
Sep 2007 |
Oct 2007 |
Oct 2006 |
Yr % Change
|
|
| # Leased |
570
|
571
|
645
|
-12%
|
| Avg List Price |
$1368
|
$1354
|
$1281
|
5.7%
|
| Median List Price |
$1207
|
$1250
|
$1150
|
8.7%
|
| Avg Leased Price |
$1354
|
$1337
|
$1267
|
5.5%
|
| Med Leased Price |
$1200
|
$1245
|
$1150
|
8.0%
|
| Avg Size SQFT |
1837
|
1927
|
1882
|
2.4%
|
| Median SQFT |
1734
|
1829
|
1784
|
2.5%
|
| Avg $ per SQFT |
$0.74
|
$0.69
|
$0.67
|
3.0%
|
| Avg Days on Mkt |
43
|
40
|
52
|
-23%
|
| Median Days on Mkt |
31
|
32
|
44
|
-27%
|
Below is a previous month and Year-to-Date comparison.
Read more
Austin Rental Market Update – September 2007
October 29, 2007
The rental market in Austin remains strong, helped further by the fact that there are in fact some qualified buyers who are electing to rent instead of buy because they fear that there is an Austin Real Estate bubble, and they don’t want to buy into that bubble. I’m not going to go into several paragraphs of “there isn’t a bubble” commentary, but there is not a real estate bubble in Austin TX.
To those buyers voluntarily taking yourselves out of the purchase market, the rest of the buyers thank you, as do all of us who own rental property. You’re helping create better purchase opportunities for the buyers who are smart enough to recognize this as a great time to buy a home in Austin, and you’re creating more demand for rental homes, which helps drives up rent prices. If you are qualified and ready to buy a home in Austin, and you know you will live there at least 2 years, there is absolutely no reason not to purchase a home in Austin TX today.
For September in Austin, average rents are up 6.7% over Sept 2006, from $1269/mo. a year ago to $1354 this September. Like the sales market, our number of homes rented is down over a year ago. The average and median days on market for rental homes is substantially better than a year ago at 43 days average, and 31 days median. This means half of all rental homes leased through the Austin MLS found a tenant in 31 days or less. Not bad.
September stats and year to date stats are below. I haven’t had time to do my area breakdowns, so I’m posting what I can and will try to catch up on the quarterly area breakdowns later this week.
Read more
Austin Rental Market Update – August 2007
September 30, 2007
The Austin rental market saw rising rental rates again for August 2007, up 2.4% over last year to $1384 per month. Not a rise worth celebrating, but a gain nonetheless. The number of homes rented fell 5% though, from 806 last August to 765 this August. This may be due to fewer renters moving to new rentals in Austin (churn), but I thought some of the first time buyers who are now unable to obtain home loans would have helped create higher demand. It may be that the market already absorbed those buyers over the past 6 years and there are simply none remaining.
Below you’ll find a month by month chart, a year to date, and a history of rental rates in Austin going back to 1999. Next month I’ll provide a quarterly breakdown by area through September 2007. As usual, post any comments or questions and I’ll be happy to answer.
|
July 2007
|
Aug 2007 |
Aug 2006 |
Yr % Change
|
|
| # Leased |
791
|
765
|
806
|
-5%
|
| Avg List Price |
$1385
|
$1394
|
$1364
|
2.2%
|
| Median List Price |
$1250
|
$1225
|
$1200
|
2.1%
|
| Avg Leased Price |
$1378
|
$1384
|
$1352
|
2.4%
|
| Med Leased Price |
$1225
|
$1225
|
$1200
|
2.1%
|
| Avg Size SQFT |
1848
|
1871
|
1882
|
-0.6%
|
| Median SQFT |
1761
|
1766
|
1751
|
0.9%
|
| Avg $ per SQFT |
$0.75
|
$0.74
|
$0.72
|
2.7%
|
| Avg Days on Mkt |
37
|
37
|
44
|
-16%
|
| Median Days on Mkt |
29
|
31
|
34
|
8.9%
|
Below is the Year to date breakdown.
Read more
Austin Rental Market – July 2007 stats update
August 26, 2007
The Austin rental market continues to see rising rents. The mortgage problems in the sub-prime mortgage loan market are helping rental markets in all parts of the U.S., as renters who should not be qualified to purchase a home are indeed remaining renters, as they should. Austin has the added benefit of a strong job market, which is bringing new renters into the Austin area. These newcomers are often qualified to buy a home but do not want to commit to a home purchase immediately, so they rent for a year or two while deciding where they want to buy, and making sure the new job works out. Thus, there continues to be an influx of quality renters.
|
June 2007
|
July 2007
|
July 2006
|
Yr % Change
|
|
| # Leased |
750
|
791
|
832
|
-4.9%
|
| Avg List Price |
$1370
|
$1385
|
$1324
|
4.6%
|
| Median List Price |
$1250
|
$1250
|
$1200
|
4.2%
|
| Avg Leased Price |
$1364
|
$1378
|
$1313
|
5.0%
|
| Med Leased Price |
$1250
|
$1225
|
$1200
|
2.1%
|
| Avg Size SQFT |
1897
|
1848
|
1904
|
-2.9%
|
| Median SQFT |
1810
|
1761
|
1799
|
-2.1%
|
| Avg $ per SQFT |
$0.72
|
$0.75
|
$0.69
|
16%
|
| Avg Days on Mkt |
41
|
37
|
47
|
-21%
|
| Median Days on Mkt |
28
|
29
|
36
|
-19%
|
Stats Summary:
Average rents are up 5% this July over July 2006.
Average Days on Market for July 2007 was 37 days, which is a 21% decrease from July 2006.
Median Days on market is 29 days for July, which is a 19% decrease over last year. This means more than half of all homes leased through the Austin MLS rent in 29 days or less. This marks a return to a good landlord’s market, though there are still plenty of homes that do not rent quickly, either due to overpricing, poor condition, poor marketing by the agent, or all three.
Below is a breakdown of stats for YTD 2007 compared to the same period 2006.