Rents continue to rise in Austin as more buyers opt to be renters and the supply of homes shrinks relative to demand. See the graph below for a snap shot of the wild ride Austin rental rates have taken since 1999.
It took over a decade for Austin’s rental rates to return to their 2001 peaks. Good for renters but it’s been a rough 10 years for landlords. And not all homes are back to pre-2001 rates, these are just the averages.
For November 2011 compared to a year ago, let’s take a look at the chart below.
| Austin Real Estate Rental Market Update Nov 2011 | ||||
| Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data | ||||
| Oct 2011 | Nov 2011 | Nov 2010 | Yr % Change | |
| # Rented | 733 | 620 | 717 | -13.53% |
| Avg List | $1,541 | $1,529 | $1,439 | 6.25% |
| Med List | $1,350 | $1,325 | $1,275 | 3.92% |
| Avg Rent | $1,534 | $1,512 | $1,427 | 5.96% |
| Med Rent | $1,350 | $1,300 | $1,250 | 4.00% |
| Rent/List % | 99.55% | 98.89% | 99.17% | -0.28% |
| Avg SQFT | 1,995 | 1,918 | 1,961 | -2.19% |
| Med SQFT | 1,776 | 1,736 | 1,792 | -3.13% |
| Avg $ SQFT | $0.77 | $0.79 | $0.73 | 8.33% |
| Avg DOM | 27 | 29 | 39 | -25.64% |
| Median DOM | 19 | 20 | 30 | -33.33% |
| # Expired | 33 | 41 | 35 | 17.14% |
| # Withdrawn | 89 | 101 | 119 | -15.13% |
| Not Rented | 122 | 142 | 154 | -7.79% |
| Not Rented % | 14.27% | 18.64% | 17.68% | 5.40% |
Average Rent prices are up 6%. Median rent values in Austin are up 4%. Homes are leasing 25% faster than Nov a year ago, average 29 days instead of 39. Median Days on Market has fallen from 30 days a year ago in Nov to 20 days this November. The number of expired lease listings has increased a bit, which seems at odds with the other stats, but it’s a pretty small number either way.
Finally, let’s look at the Year to Date stats for the Austin rental market for November 2011.
| Austin Real Estate Rental Market YTD Update Jan-Nov 2011 | |||
| Homes only (no condos, duplexes, etc) – Data from Austin MLS | |||
| Jan-Nov 11 | Jan-Nov 10 | Yr % Change | |
| # Rented | 9421 | 8711 | 8.15% |
| Avg List | $1,557 | $1,495 | 4.15% |
| Med List | $1,350 | $1,295 | 4.25% |
| Avg Rented | $1,549 | $1,481 | 4.59% |
| Med Rented | $1,350 | $1,295 | 4.25% |
| Leased/List % | 99.49% | 99.06% | 0.43% |
| Avg SQFT | 1941 | 1937 | 0.21% |
| Med SQFT | 1788 | 1781 | 0.39% |
| Avg $ SQFT | $0.80 | $0.76 | 4.38% |
| Avg DOM | 25 | 31 | -19.35% |
| Median DOM | 15 | 20 | -25.00% |
| # Expired | 328 | 402 | -18.41% |
| # Withdrawn | 911 | 1122 | -18.81% |
| Not Sold | 1239 | 1524 | -18.70% |
| Not Sold % | 12% | 15% | -21.94% |
Year to date, average rent prices in Austin are up 4.6% from the same 11 month time period a year ago. More homes have leased, 9,421 homes leased in Austin Jan-Nov 2011, up from 8.711 during the same time period in 2010. Still, the demand has increased more than the supply.
I expect 2012 to be another strong year for rental rates in Austin. We’re seeing a lot of “buyer quality” renters leasing our homes. I’m seeing FICO scores over 800 from applicants with excellent income. When I ask why they’re renting instead of buying, the responses are a reflection of the general lack of confidence in the U.S. economy as a whole, and specifically the real estate market. Most will become buyers, perhaps within a year or two, but they do not feel a sense of urgency even with interest rate still close to 4%.
Thanks for this update, Steve. I must say it is encouraging to finally see the market picking up (we bought at the wrong time, in hindsight, in Jan 2008).
From our location outside the US it is hard to tell how your markets are going generally. Hopefully your stats indicate a return to steady growth in the US economy. Or am I too optimistic?
Hi Peter,
Unfortunately it’s hard to predict the US economy for 2012. Two big unknowns:
1) European debt crisis, which affects us more than most people realize.
2) US Politics – stuck in perpetual stalemates.
In both instances, a lot of kicking the cans down the road instead of gritting our teeth and making the tough choices.
I’m hopeful for 2012 though.
Steve