Rent values for single family homes in the Austin area slid a bit lower in June compared to June of last year. The market is however showing an impressive ability to absorb the additional supply created by investors. The first six months of 2006 compared to the first 6 months of 2005 have seen a 50% increase in the number of homes rented through the Austin MLS. 741 homes were leased through the Austin MLS in June, and almost 4000 for the first 6 months of 2006, which I know must be a record, but I haven’t gone back to verify that yet. The “days on market” is down slightly from the same period last year. Many property managers I know say they are now able to get most homes rented in 30 days or less when they are priced right and in great condition. Very few of the investment homes we sell take longer than 30 days to lease. We continue to advise investors to stay as close to Austin as they can afford, buy homes that are at or near the median price for the neighborhood, and buy investment property that will rent for average or above average rents for the area.
The rental market will turn around when interest rates and home prices get high enough to continue disuading those investors who require better cash flow. We are in an odd grey area right now with Austin’s single family home investment market. It is still a great time to buy due to the upside for appreciation, but fewer investors can afford the increasing cash flow gap that results from rising sales values, higher interest rates and stagnant rent prices. This is starting to weed out the more hesitant investors who are unwilling to accept the negative cash flow associated with down payments of less than 30%. As those more timid investors get weeded out, the investors who have already bought will enjoy rising rents in coming years as the supply of new rental homes to the Austin market slows down. Patience is the name of the game for now.
I’ve put together a year-to-date chart this month along with the monthly data, as we are midway through the year now. I still think we have a chance for 2006 to be the first upturn year since 2000/2001, but it’s just as likely that 2006 will be our bottom-out year for rental rates.
June Leasing Stats for Austin 2005/2006
|
Jan-Jun YTD Leasing Stats 2//5/2006
|
|||||
June 2005
|
June 2006
|
% Change
|
YTD 2005
|
YTD 2006
|
% Change
|
|
# Leased |
541
|
741
|
+37%
|
2623
|
3926
|
+50%
|
Avg List Price |
$1306
|
$1278
|
-2%
|
$1252
|
$1238
|
-1.1%
|
Median List Price |
$1195
|
$1195
|
+ 0%
|
$1150
|
$1150
|
0%
|
Avg Leased |
$1298
|
$1269
|
-2.2%
|
$1239
|
$1227
|
-1%
|
Med Leased Price |
$1150
|
$1150
|
+0%
|
$1145
|
$1125
|
-1.7%
|
Avg Size SQFT |
1837
|
1841
|
+0.02%
|
1795
|
1823
|
+1.6%
|
Median SQFT |
1695
|
1750
|
– 3.2%
|
1673
|
1749
|
+4.5%
|
Avg $ per SQFT |
$0.71
|
$0.69
|
– 2.8%
|
$0.69
|
$0.67
|
-3%
|
Avg Days on Mkt |
52
|
48
|
– 7.7%
|
61
|
58
|
-5%
|
Median DOM |
42
|
38
|
– 9.5%
|
49
|
46
|
-6%
|
Below is a breakdown by city, and a 2006 YTD analysis.
# Leased June
|
Avg Leased $
|
Avg Size SQFT
|
Avg $ Per SQFT
|
Avg Days on Mkt
|
|||||||||||
City/Area |
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
Austin |
279
|
370
|
+33
|
1436
|
1377
|
-4.0
|
1830
|
1749
|
-4
|
0.78
|
0.78
|
0%
|
44
|
40
|
-9
|
Round Rock |
77
|
126
|
+64
|
1201
|
1190
|
-0.9
|
1966
|
2075
|
-6
|
0.61
|
0.57
|
-7%
|
56
|
51
|
-9
|
Cedar Park/Leander |
59
|
92
|
+56
|
1129
|
1154
|
+2.2
|
1880
|
1974
|
+5
|
0.60
|
0.58
|
-3%
|
49
|
42
|
-14
|
Hutto/Manor/Elgin |
27
|
40
|
+48
|
1084
|
1035
|
-4.5
|
1790
|
1777
|
-0.7
|
0.61
|
0.58
|
-5%
|
107
|
69
|
-36%
|
Kyle/Buda |
34
|
33
|
-2.9
|
1070
|
1075
|
+0.5
|
1716
|
1828
|
+6.5
|
0.62
|
0.59
|
-5%
|
64
|
43
|
-33%
|
Dripping Springs |
4
|
14
|
+250
|
1242
|
1795
|
+45
|
1672
|
2248
|
+34
|
0.74
|
0.80
|
+8%
|
21
|
50
|
+138%
|
Lakeway |
3
|
8
|
+167
|
1516
|
1717
|
+13
|
2463
|
2284
|
-7
|
0.66
|
0.75
|
+13%
|
52
|
91
|
+76%
|
Pflugerville |
38
|
46
|
+21
|
1168
|
1138
|
-3.0
|
1847
|
1804
|
-2
|
0.63
|
0.63
|
0%
|
48
|
74
|
-54%
|
Westlake/Eanes |
14
|
8
|
-43
|
2277
|
2499
|
+10
|
2506
|
2375
|
-5
|
0.91
|
1.05 |
+15%
|
57
|
32
|
-44%
|
Georgetown |
17
|
18
|
+6
|
1184
|
1250
|
+6
|
1704
|
1961
|
+15
|
.64
|
0.64
|
0%
|
47
|
54
|
+15%
|
Below is a Year to Date breakdown of the Austin Leasing Market for Jan thru June 2006 compared to 2005.
# Leased
|
Avg Leased $
|
Avg SQFT
|
Avg $ per sqft
|
Avg Days on Mkt
|
|||||||||||
City Breakdown |
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
Austin |
1398
|
1916
|
+37
|
1314
|
1329
|
+1.1
|
1733
|
1737
|
+0.2
|
$0.76
|
$0.77
|
+1.3
|
59
|
52
|
-11%
|
Round Rock |
319
|
605
|
+89
|
1182
|
1165
|
-1.4
|
1955
|
2011
|
+2.8
|
$0.60
|
$0.58
|
-3.3
|
65
|
63
|
-3%
|
Cedar Park Leander |
338
|
487
|
+44
|
1121
|
1161
|
+3.6
|
1878
|
1989
|
+5.9
|
$.60 |
$0.58
|
-3.3
|
54
|
57
|
+6%
|
Hutto/Manor/Elgin |
107
|
225
|
+110
|
1071
|
1028
|
-4.0
|
1759
|
1853
|
+5.3
|
$0.61
|
$0.55
|
-9.8
|
86
|
76
|
-11%
|
Kyle/Buda |
128
|
224
|
+75
|
1059
|
1054
|
-0.5
|
1744
|
1798
|
+3.1
|
$0.61
|
$0.59
|
-3.3
|
63
|
63
|
0%
|
Dripping Springs |
16
|
38
|
+138
|
1425
|
1635
|
+15
|
2000
|
2159
|
+8
|
$0.71
|
$0.76
|
+7.0
|
22
|
52
|
+136%
|
Lakeway |
25
|
35
|
+40
|
1784
|
1710
|
-4.3
|
2351
|
2169
|
-7.7
|
$0.76
|
$0.79
|
+3.9
|
104
|
59
|
-43%
|
Pflugerville |
185
|
299
|
+62
|
1196
|
1126
|
-5.9
|
1898
|
1880
|
-0.9
|
$0.63
|
$0.60
|
+4.8
|
60
|
72
|
+20%
|
Westlake/Eanes |
53
|
46
|
-15
|
2144
|
2367
|
+10
|
2341
|
2343
|
0%
|
$0.92
|
$1.01
|
+9.7
|
69
|
37
|
-86%
|
Georgetown |
58
|
79
|
+36
|
1144
|
1163
|
+1.7
|
1788
|
1841
|
+3.0
|
$0.64
|
$0.63
|
-1.6
|
60
|
59
|
-1.7%
|
# Leased
|
Avg Leased
|
Avg SQFT
|
Avg $ per SQFT
|
Avg Days on Market
|
|||||||||||
Area Breakdown |
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
2005
|
2006
|
%Chg
|
E. Central Austin MLS Areas 3 & 5 |
92
|
151
|
+64
|
1026
|
1050
|
+2.3
|
1406
|
1290
|
-8.2
|
$0.73
|
$0.81
|
+11
|
66
|
62
|
-6%
|
S. Central Austin MLS Areas 6 & 7 |
58
|
76
|
+31
|
1322
|
1326
|
+0.3
|
1330
|
1193
|
-10
|
$1.00
|
$1.11
|
+11
|
38
|
37
|
2.6%
|
South Austin MLS Area 10 |
221
|
292
|
+24
|
1068
|
1113
|
+4.2
|
1500
|
1494
|
-0.4
|
$0.71
|
$0.75
|
+5.6
|
55
|
45
|
-18%
|
Southwest Austin MLS Area SW |
154
|
205
|
+33
|
1474
|
1491
|
+1.2
|
2148
|
2150
|
0%
|
$0.69
|
$0.69
|
0%
|
50
|
51
|
0%
|
West Austin MLS Area W |
25
|
28
|
+12
|
1608
|
1823
|
+12
|
2121
|
2179
|
+2.7
|
$0.76
|
$0.84
|
+11
|
56
|
52
|
-7%
|
Central Austin MLS Areas 1B,4 |
148
|
148
|
0%
|
1594
|
1607
|
+0.8
|
1504
|
1386
|
-7.8
|
$1.06
|
$1.16
|
+9.4
|
52
|
41
|
-21%
|
NW Hills Austin MLS Area 1A |
92
|
71
|
-22
|
1657
|
1703
|
+2.7
|
1578
|
1472
|
-6.7
|
$1.05
|
$1.16
|
+10
|
53
|
40
|
-24%
|
NW Austin MLS Area RN |
25
|
51
|
+104
|
2357
|
2213
|
-6.1
|
2896
|
2786
|
-3.8
|
$0.81
|
$0.79
|
-2.4
|
71
|
60
|
+15%
|
NW Austin MLS Area LN |
23
|
40
|
+74
|
1435
|
1291
|
-10
|
1951
|
1743
|
-11
|
$0.74
|
$0.74
|
0%
|
77
|
65
|
-16%
|
NW Austin MLS Area 1N |
77
|
96
|
+25
|
1238
|
1305
|
+5.4
|
1720
|
1762
|
+2.4
|
$0.72
|
$0.74
|
+2.7
|
54
|
47
|
+13%
|
NW Austin MLS Area NW |
100
|
120
|
+20
|
1206
|
1294
|
+7.3
|
1881
|
1947
|
+3.5
|
$0.64
|
$0.66
|
+3.1
|
54
|
54
|
0%
|
N. Central Austin MLS Area 2 |
59
|
76
|
+29
|
1028
|
1099
|
+6.9
|
1199
|
1202
|
-0.3
|
$0.86
|
$0.91
|
+5.8
|
65
|
44
|
-32%
|
North Austin MLS Area 2N&N |
129
|
153
|
+18
|
1102
|
1125
|
+2.1
|
1602
|
1636
|
+2.1
|
$0.69
|
$0.69
|
0%
|
67
|
59
|
-12%
|
N. East Austin MLS Area NE |
40
|
99
|
+148
|
1012
|
1135
|
+12
|
1530
|
1804
|
-18
|
$0.66
|
$0.63
|
-4.5
|
64
|
61
|
-4.7%
|
East Austin MLS 3E&5E |
23
|
64
|
+178
|
988
|
1054
|
+6.7
|
1490
|
1623
|
+8.9
|
$0.66
|
$0.65
|
-1.5
|
90
|
69
|
-23%
|
S. East Austin MLS 9,11,SE |
69
|
111
|
+61
|
1012
|
1012
|
0%
|
1480
|
1570
|
+6.1
|
$0.68
|
$0.64
|
-5.9
|
61
|
63
|
+3.2%
|
Below is the Austin rental summary from 1999 through 2005.
Hello Steve
Your blog is interesting. I’ve just discovered it.
Thank you for the data! Do you create these html tables by hand or use some software to help?
Hi Damon,
Unfortunately, I currently calculate and enter the data manually. It’s hard to automate it, for a number of reasons, but I am working with a coder to see if it can be done using raw MLS data. It takes a bit of time but it allows me to use that part of my brain and, in a weird kind of way, it’s relaxing and enjoyable for me. I usually do it late at night after the kids are asleep. It beats watching TV and we get very positive feedback from our buyers.
Steve, I do that kind of thing too sometimes with data. Almost like zen meditation or something. Sometimes I write code to process it too. I am a software engineer by day and a wannabe real estate hobbyist at night.
Let me know if you’d like to talk about the real estate and technology intersection sometime. I’m interested in both.