Slowing construction and rising employment will push average Austin rent prices four percent higher this year, according to real estate analyst Marcus and Millichap.
In its 2011 annual apartment forecast, the firm says only 1,000 rental units will be constructed across the entire metro area this year, compared to 2,900 units in 2010. At the same time, the company predicts local employers will add 21,000 positions this year, up from the 14,400 jobs created last year.
All of that adds up to greater demand in the city's rental market. Marcus and Millichap says asking rents will increase 4.2 percent this year to an average of $894 per month. Last year, the company says, asking rents rose 1.7 percent.
A couple interesting points from the report:
Government employment will weigh on overall job trends, but a strong tech sector and expansion in other industries will sustain high demand and low vacancy rates in the large Class A segment. Vacancy in upper-tier complexes in submarkets such as Round Rock/Georgetown, North Travis and Highway 183/Cedar Park was nearly cut in half over the past year on an unprecedented release of pent-up demand. Additional vacancy reductions in these areas will not be as significant in 2011.
Another factor that may affect rent prices is a new city rule that will require owners of the most energy inefficient apartments to reduce their electricity consumption by 20 percent. City council is still considering how apartment owners should disclose the energy efficiency of buildings to potential tenants.
Tenant advocates acknowledge that anecdotal evidence suggests rents are slowly increasing. Kathy Stark, executive director of the Austin Tenant's Council, suggests negotiating any rent increase with your landlord.
"If you're a good tenant, and you've been there for awhile and paid on a timely fashion, sometimes you can get a break," she said. "Good tenants are a good deal for landlords, and some of the better landlords encourage that."
The Austin Tenant's Council is hosting a housing fair on Saturday for tenants who want to learn about their rights and how to access legal resources or subsidized housing.