Austin Multifamily Market Report
Key Findings
- Higher-end Austin multifamily properties bring in more residents, due to lower average asking rents than other Sunbelt markets.
- The majority of new developments in Austin are made up of mid-rise properties, with this apartment style making up 40% of units underway.
- Private buyers have taken over transactions in Austin, making up 62% of sales volume.
Austin Multifamily 2024 By the Numbers
Last 12 Months | Source: CoStar Group
| Vacancy Rate | Rent Growth | Absorption in SF | Deliveries in SF | Sales Volume | |
| Q1 2024 | 14.3% | -4.7% | 27K | 38K | $515M |
| Q2 2024 | 14.6% | -4.9% | 28K | 32K | $543M |
| Q3 2024 | 15.3% | -4.6% | 33K | 23K | $249M |
| Q4 2024 | 15.3% | -4.7% | 21K | 5K | $289M |
Austin Demographics
- Unemployment Rate: 3.7%
- Current Population: 2,534,373
- Households: 1,048,682
- Median Household Income: $99,203
After noting continued growth in its labor segment, the labor market in Austin has decreased by 1.4% throughout 2024. However, companies like Samsung and Tesla announced plans to expand here, which could cause an uptick in the market’s labor segment. The expansions may also attract new graduates from the University of Texas at Austin as many students stay in the market upon graduation.
Austin Market Performance
After strong demand in previous years, demand for apartments in Austin began to slow in Q4 2024. The slowdown brought the market’s vacancy rate to 15.3%, one of the highest vacancy rates in the country. However, absorption metrics are steady in the metro with several residents relocating here. The absorption of around 4,000 units this quarter led the metro to record 19,000 units absorbed throughout 2024, which is one of the highest absorption rates in the U.S.
As absorption remains high, rent growth has noted consistent declines. Higher-end apartments were affected the most as the oversupply of these properties led rent growth to decrease to -4.6%. This trend should continue throughout 2025 as Austin’s apartment sectors will continue to be affected by increased supply. Class C buildings will see an increase in vacancy. As concessions lower effective rents of higher class product, the effective rents of Class C product will suffer because there will be a flight-to-quality away from this sector.
Construction
Most new construction activity has begun to target Austin’s urban and suburban areas. Suburban locations will see the most new developments as 11,000 units are underway in submarkets like Northeast Austin, San Marcos, and Georgetown-Leander. In the urban area, 22% of its inventory is on the way with new construction.
Sales
Sales activity is split among Austin’s urban and suburban areas. The suburbs account for 53% of sales volume. Among the market’s trades, Class A properties made up the most transactions at 58%.
