CultureMap Austin writes,"Austin has been in such an building boom that even a slowing rate of new apartment buildings is still one of the fastest in the country. According to a new insight report from RentCafe, the Austin metro area has the third highest new apartment construction rate nationwide, after previously holding the No. 1 title in 2023.
The report from August 7 analyzed new apartment construction data across 369 U.S. metropolitan statistical areas (MSAs). For the purpose of the study, only apartment buildings containing 50 or more units were included. Any U.S. metros with fewer than 300 units or fewer than two properties/buildings were excluded.
The top two metros that outperformed Austin are New York (No. 1) and Dallas (No. 2) with far higher rates of newly built apartments expected in 2024. Dallas-Fort Worth developers are expected to build a staggering 32,932 total apartment units in 2024, which is just three fewer units than New York City's anticipated goal.
The Austin metro area is still expected to complete 21,506 new apartments by the end of the year, so construction isn't slowing down by much in comparison to the other top two metros. In just Austin proper, developers are anticipating 12,157 completed units by year-end.
Austin also landed in the No. 3 spot for the highest apartment construction rate between 2020 and 2022, (preceding its chart topping projection in 2023) with 45,051 new apartment units opening around the metro since the beginning of the so-called "pandemic building boom."
The report attributes booming construction rates to Austin's steady population growth, the area's thriving job market, and its desirability among major employers.
"Plus, remote work has consistently brought people from more expensive coastal cities, and even though housing prices are rising, apartments in Austin are still more affordable than those in places like San Francisco or New York," the report's author wrote.
Austin makes up the bulk of new apartments in the area, while San Marcos is expected to build the second highest number of new apartments in the metro, totaling 1,842 units. Other suburbs like Manor and Georgetown will complete an anticipated 1,633 and 1,517 apartments by the end of the year, respectively.
Here's how many new apartments other Austin-area cities expect to build by the end of 2024:
- Hutto – 1,193 units
- Leander – 972 units
- Del Valle – 595 units
Austin apartment construction by 2028
Based on the number of newly built apartments from 2019 to 2023, RentCafe's analysts extrapolated that New York, Dallas-Fort Worth, and Austin will continue dominating new apartment construction through 2028. But unlike past years when there was a steady growth in completed units, the report predicts construction will dwindle until 2027; Then it will experience a big hike in 2028.
"[A]partment construction starts are expected to keep falling throughout the next year as developers struggle to get financing due to stricter loan standards amid economic uncertainties, which causes delays in projects," the report said.
For context, Dallas-Fort Worth had the highest number of new apartments completed over the five-year period – 128,418 units – from 2019 to 2023, versus New York's 116,207 newly built units. Austin only built 72,011 new units during the same time period, landing at No. 8 nationally, but apparently the report expects that the higher ranking of more recent years will stick.
RentCafe calculated New York will lead the nation with 150,327 new apartments built by the end of 2028, and DFW will trail behind with 108,178 completed units. The Metroplex's anticipated figures are 28 percent lower than New York's expected apartments.
Austin, however, will claim No. 3 nationwide with projected 80,046 new apartments by 2028, about 8,000 more units than those that were completed from 2019 to 2023.
"Here, Austin's booming employment market, particularly in tech, is a significant draw for new residents looking for high-paying STEM jobs," the report said. "The expansion of major employers, including Tesla and Oracle, is expected to further increase the demand for rental apartments in the area."
The full report and its methodology can be found on rentcafe.com."
Source: CultureMap Austin
Written by: Amber Heckler
Published: August 16, 2024
Posted by Grossman & Jones Group on
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