The Austin apartment market has been one of the best performers nationwide in the past year. September occupancy reached 96.9%, the market’s best showing since the tech boom in 2000. Occupancy progressed by 270 basis points (bps) in the past year, an improvement on par with the nation-leading comebacks seen in Miami, San Francisco and West Palm Beach. However, unlike those markets, Austin’s occupancy progress was made in the face of a significant new construction boom. In the past decade, the existing inventory base in Austin swelled by 42.3%, with the completion of nearly 80,000 new units. This was one of the biggest increases nationwide, following only Charlotte, where supply upped the inventory by 46.4%. Despite this influx of competition, occupancy in Austin’s Class A apartments is notably strong at 96.5%, up 360 bps in the past year. Apartment operators also pushed rents at a nationwide-leading pace, with annual asking prices climbing 21.3% in the year-ending September. Those Class A units that are enjoying sizable demand right now are also seeing big rent growth, with prices hiking 28.5% annually. One of demand drivers in Austin has been the local economy and its ability to bounce back quickly from the 2020 downturn. Austin was one of the first major apartment markets to recover all the jobs lost in the COVID-19 recession and, in fact, has about 17,000 more jobs now than it did before the pandemic started.
