March 2010

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Occupancy continued to increase in the Austin multifamily sector with vacancy just above 10% in March.  While the market posted strong absorption figures both on a monthly and annual basis, the construction pipeline also continued to decline steadily. The decrease in rental rates over the month, particularly on a per unit basis, remains a major concern. Class A properties are the worst hit as their monthly declines were the most significant among all classes with per unit and per square foot decreases of $8.35 and $0.009, respectively. Anticipate the market to continue the current trend and lead the other three major Texas markets in overall occupancy rates in the near future.

Austin apartment market occupancy increased 0.34 points in March to 89.99% and has also increased 0.43 points since March 2009.  Average rent per square foot has decreased $0.005 to $0.969 per square foot during the month, and has declined $0.019 per square foot over the past 12 months.  Average rent per unit posted a decrease of $5.11 in March; currently at $815.47, rent per unit is down $11.77 over the past year.  Austin posted positive absorption of 556 units in March, bringing annual absorption to positive 5,455 units.

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