While performances in urban core apartments currently lag results posted in the suburbs across most markets, that relationship doesn’t hold true everywhere. Austin is among the key exceptions. Effective rents for new leases are up 3.5% on an annual basis in the Downtown/University submarket, which joins South Austin and East Austin at the top of the neighborhood-level rent growth leaderboard. Today’s pricing power in Austin’s urban core reflects that completions are briefly taking a breather. No new market-rate product was delivered downtown in the year-ending mid-2018, compared to earlier annual completions as high as 1,300 or so units. New supply will return very quickly, however, so downtown’s current rent growth pace might not be sustainable.
