Austin is hardly immune from the housing crisis—quite the opposite, in fact; with a population that’s perpetually on the rise, the metro area hasn’t been able to keep enough inventory to house new buyers or renters, much less affordably.
But it’s not for lack of trying, it seems—at least when it comes to building apartments. According to a new report from listings and research site RentCafe, an estimated 10,783 new units will open in the metro area by the end of the year. That puts Austin fifth on the site’s list of major U.S. cities ranked by amount of planned new apartment construction for the coming year.
RentCafe—which gets its numbers from market analysis site YardiMatrix—recently released its annual report on US Apartment Construction, which takes a look at stats for 20 U.S. cities, conducting an analysis that includes a look at rent prices, demand, and growth and ranks different areas of the top metros by new units expected.
Apartment construction across the U.S. has slowed overall and is projected to continue to decline in 2019, allowing some markets—most notably, the Dallas-Fort Worth metro area, with a whopping 22,196 expected deliveries—to jump to the head of the pack. Seattle, Washington, moved to second place on the chart, and perennially first-ranked New York City was bumped down to number three. With 13,031 new units expected, Miami, Florida, ranks fourth.
With spots two through four clustered around the 13,000 mark, the Austin metro’s expected 10,783 units seems almost paltry, but nevertheless lands it in fifth place on chart.
That’s in part because, according to the report, apartment construction across the U.S. is projected to continue to slow down this year, with an estimated 8.2 percent drop from 2018—from 326,240 to 299,442 nationwide. Yardi Matrix data also shows that, while the decade-long boom will add up to around 2.34 million apartments added, that’s still below construction levels in the 1970s (close to 3 million apartments added) and the 1980s (2.64 million new units). A paltry 1.6 million units were added in the 1990s, but the rate started increasing sharply around the year 2000.
Possibly related to recent construction slowdown is that, according to RentCafe’s report, average rent growth across the country has slowed down slightly, with a 2.7 percent increase this year, compared to a 3.7 percent rise in 2018. (Note that this doesn’t mean rent isn’t still going up—it’s just going up slightly more slowly.) The report conjectures that the rent-growth slowdown could be due to a recent “glut” of new apartments, Yardi Matrix notes that “rising construction costs and a tight labor supply” have contributed to an overall decrease in expected apartment completions; at the same, it points to a “larger trend of developers gearing up for next cycle.”
Whatever the case nationally, the Austin metro—which encompasses parts of five counties—isn’t among the slowdowns; it delivered 10,701 units last year, so the number is steadily rising. Within the area, the city of Austin is clearly the fastest-growing city, with 6,664 units planned. It’s followed by Georgetown and Round Rock. San Marcos is the only city south of Austin in the area with a significant expected number of new apartments.