Austin: Growing Demand for Apartments Comes from Decline in Homeownership Rates
Austin has earned itself quite the reputation in recent years, attracting an onslaught of companies followed by families and college graduates. With this rising population, job options have also increased, making the unemployment rate of the Texas capital one of the lowest in the country at 3 percent. While these trends have spurred the housing market in the past few years, Austin has recently seen an increase in demand within the apartment market.
This increase can be largely credited to a spike in home prices — apartments provide a much more affordable option, and an increasing amount of Austin residents turn to apartment living when faced with the financial decision.
In fact, the homeownership rate in Austin has plummeted from a high 71 percent in 2006 to just around 50 percent this past year.
“As the renter population has grown, apartment developers have increasingly targeted the Austin area, adding nearly 50,000 units over the last five years. Demand has been strong and positive net absorption fell short of these supply additions by just 6,000 units during that span.”
While the Downtown–University area of Austin has seen the most growth in apartment building installation since 2012, 2018 is predicted to focus on growth in the Far South Austin area. A project referred to as Lenox Springs in South Austin will add 400 units to the market come the fourth quarter of this year.
Furthermore, suburb areas such as Pflugerville and Cedar Park will generate a lot of investor interest this year in the apartment market. According to the article, “More than 4,000 units have been added in each of these areas over the last five years and strong absorption has kept vacancy tight — below 5 percent in most of these locations.”
[Via Rebusiness Online]Posted on Thursday, March 1, 2018