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|
|Avg $ SQFT||$0.72||$0.71||$0.72||-2.01%|
|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.
See what happened (below) after the tech bust and 9/11, back in 2001? We are not going to see that sort of dip, but I think we might be flat this year before prices keep rising next year. One thing we have working against us in the residential leasing of single family houses in Austin is that the apartment vacancy rates are rising and will continue to rise this year due to over building of new apartments. That will create move-in specials and incentive deals offered by the apartments that siphon away our house renters who normally would not want an apartment.
Note above that renters are still paying less in average rents than they were in the year 2000. That’s really amazing. Renters have had it good in Austin for many years now.
I was going to write more about the typical sales/rent price ratios seen over time (1%) compared to what we see today (0.7%), but it’s turning into an entirely new topic as I work on the graphs, so I’ll end this one here and invite you to subscribe to the Crossland Team blog to stay current on Austin real estate market stats and other related stuff.
As always, comments and questions are welcome.