The number of homes leased in Austin this April 2007 dropped quite a bit from April 2006, down 17% from 671 homes leased last year to 554 homes leased in April of this year. I’m not sure why that is, but I’ll talk to some property managers and see if they are having more renewals this year. That’s possible with mortgage standards tightening up, which will cause more renters to remain renters. The average rents are up 5% though, breaking through the $1300 mark to $1310 per month, up from $1249/mo. average last April. The year-to-date rental rates are looking similarly healthy compared to Jan-Apr last year. Days on market are down to 48 average and 36 median, which means half of the homes leased through the Austin MLS rent in less than 36 days.
This month I’ve included a new chart with rental breakdown/comparison by cities, including Austin, Round Rock, Buda/Kyle, Cedar Park, Leander, and Hutto. More on that below.
|
Mar 2007
|
Apr 2007
|
Apr 2006
|
Yr % Change
|
|
| # Leased |
629
|
554
|
671
|
-17%
|
| Avg List Price |
$1312
|
$1320
|
$1263
|
4.5%
|
| Median List Price |
$1200
|
$1195
|
$1150
|
3.9%
|
| Avg Leased Price |
$1301
|
$1310
|
$1249
|
4.9%
|
| Med Leased Price |
$1195
|
$1195
|
$1145
|
4.4%
|
| Avg Size SQFT |
1883
|
1882
|
1850
|
1.7%
|
| Median SQFT |
1776
|
1784
|
1768
|
0.9%
|
| Avg $ per SQFT |
$0.69
|
$0.70
|
$0.71
|
-1.4%
|
| Avg Days on Mkt |
51
|
48
|
56
|
-14%
|
| Median Days on Mkt |
36
|
36
|
45
|
-20%
|
Below is a year-to-date chart of 2006/2007 Jan-Apr homes that have rented in and around Austin.
|
Jan-Apr 2006
|
Jan-Apr 2007
|
Yr % Change
|
|
| # Leased |
2508
|
2463
|
-1.8%
|
| Avg List Price |
$1213
|
$1283
|
5.8%
|
| Median List Price |
$1100
|
$1195
|
8.6%
|
| Avg Leased Price |
$1201
|
$1274
|
6.1%
|
| Med Leased Price |
$1100
|
$1175
|
6.8%
|
| Avg Size SQFT |
1814
|
1869
|
3.0%
|
| Median SQFT |
1743
|
1771
|
1.6%
|
| Avg $ per SQFT |
$0.66
|
$0.68
|
3.0%
|
| Avg Days on Mkt |
56
|
55
|
-1.8%
|
| Median Days on Mkt |
49
|
42
|
-14%
|
Below is a breakdown of rental data by city. Note the much stronger averages across the board in Austin. This is why we like Austin compared to other areas. Yes, the homes are more expensive in Austin, so the cash flow may not look as good on a spreadsheet compared to Round Rock or Hutto. Yes, many of the homes in Austin are older compared to the other areas. But good homes in established neighborhoods in Austin rent faster and attract a better quality renter. In the long run, I think that’s the most important factor when looking at an investment for long term hold – the ability to attract a quality renter and keep the property occupied.
I sound like a broken record each time I say this, but your spreadsheet goes out the window with that first 90 day vacancy and/or that marginal tenant that you or your property manager let in because you were desperate, and who then tore your place up.
|
Austin
|
Round Rock
|
Buda/Kyle
|
Cedar Park
|
Leander
|
Hutto
|
|
| # Leased |
1109
|
396
|
153
|
154
|
128
|
97
|
| Avg List Price |
$1382
|
$1199
|
$1101
|
$1296
|
$1113
|
$1044
|
| Median List Price |
$1225
|
$1150
|
$1095
|
$1250
|
$1095
|
$1025
|
| Avg Leased |
$1372
|
$1191
|
$1099
|
$1288
|
$1112
|
$1035
|
| Med Leased |
$1200
|
$1150
|
$1095
|
$1250
|
$1095
|
$1000
|
| Avg Size SQFT |
1766
|
2015
|
1835
|
2090
|
1834
|
1884
|
| Median SQFT |
1638
|
1870
|
1784
|
2088
|
1815
|
1856
|
| Avg $ per SQFT |
$0.84
|
$0.59
|
$0.62
|
$0.62
|
$0.61
|
$0.55
|
| Avg Days on Mkt |
52
|
57
|
63
|
58
|
55
|
77
|
| Med Days Mkt |
38
|
43
|
49
|
42
|
46
|
69
|
| Avg Year Built |
1985
|
1999
|
2004
|
1998
|
2000
|
2005
|
| MedYear Built |
1988
|
2001
|
2004
|
2000
|
2003
|
2005
|
Hi Steve,
Thanks for all the data. I’m a bit confused though. There was a big drop in the number of rentals, but on average they rented for higher prices and they rented faster than last year. The only logical explaination I can think of is that there are fewer homes available for rent. I know from your previous posts that for a many years, there was rapid growth in the number of homes rented, but the rents stayed the same or kept falling. Now we are seeing a drop in the number of homes rented, but rent rates are rising and days in the market are falling. Any thoughts on this?
Hi Leon,
One Property Manager I talked to told me he is indeed seeing more tenants renewing their leases. He thinks that’s the reason for fewer rentals. He’s also raising rents on renewals in most instances without complaint. So his experience fits right in with the data.
Steve
Right now, I’m hearing that South Austin and just south of downtown are doing really well leasing. The outer areas such as Cedar Park/Leander and Round Rock have slowed down somewhat.
Thanks,
Grant
Grant,
I am moving to South Austin in the next 2 months. Have you seen prices go up much? Of course, this is good for the landlords, but it is alway a bad thing for the renters.
Billy