AUSTIN (Marcus & Millichap) – Although the economic downturn in Austin is expected to subside in the fourth quarter, Class-A apartment owners will face challenges into the first half of next year, according to a fourth-quarter apartment research report by Marcus & Millichap.
Homes are becoming increasingly affordable, which will likely entice some renters into ownership in the coming months.
Following are some of the most significant aspects of the Austin apartment research report:
- Payrolls are anticipated to expand in the fourth quarter, limiting job losses in Austin this year to 5,000 positions, a modest 0.6 percent decline. Since the dot-com recession, the market has added nearly 130,000 jobs.
- The pace of development in Austin will remain robust in 2009 as 9,900 units come online. A slowdown in permitting activity and thin development pipeline suggest a significant decline in construction in 2010.
- The addition of new stock will underpin a 360-basis-point increase in vacancy this year to 11.3 percent. Despite the rise, demand for apartments is expected to tick up 2.5 percent.
- Asking rents are forecasted to end the year at $852 per month, a 2.1 percent decline, while effective rents are projected to fall 4.7 percent to $747 per month.