In the extreme short-term, the impact of the COVID-19 pandemic has been negligible—at least according to a new report from Zumper, an apartment-listings site that analyzes active listings that hit the market last month and aggregates them by city to calculate median asking rents. According to its analysts, the price of the price of one-bedroom apartments grew 1.6 percent, to median of $1,280, in the past last month. Rent for two-bedroom units increased even less, to $1,560, or 0.6 percent over last month’s median.
The site puts year-over-year increases at 7.6 percent and 6.1 percent, respectively. It remained the 27th priciest US rental city on Zumper’s chart, where it has been hanging out around the number 30 slot for years.
By comparison, the national one-bedroom rent increased 0.2 percent, to a median of $1,221, last month, and the median rate for two-bedrooms grew 0.6 percent, to $1,471, according to Zumper—lower amounts and growth rates than the Austin medians.
Looking to the suburbs
While it might be worthwhile to look at the area suburbs for some relief from those hefty year-over-year jumps, rent in some of the areas surrounding Austin is comparable to that inside the city limits.
According to Abodo’s April rent report, Austin rent prices overall increased over the last month, with a 0.08 percent increase for the price of a one-bedroom apartment, at a median of $1,297 per month.
The median price of a two-bedroom unit, however, decreased by 0.13 percent, to $1,582.
Median rents weren’t far behind in surrounding cities Round Rock, Pflugerville, Cedar Park, San Marcos, TX, Georgetown, and Leander. One-bedroom medians for those suburbs ranged from $1,021 for a one-bedroom apartment in San Marcos—a 0.79 percent increase from March—to $1,458, down 0.41 percent, for a two-bedroom in Pflugerville.
How prices compare nationally
Apartment List, a rental site that uses median rent statistics from the U.S. Census Bureau and its own listing data for its reports, has also released its April rent report. It finds that rents in Austin are up 3.5 percent over the past year, the third fastest growth rate among the nation’s large cities. By comparison, its national rent index grew by just 1.7 percent over the past year.
The AL study puts Austin median rent at $1,474 for a two-bedroom apartment, compared to the national average of $1,194, compared to the national average of $1,194.
Too early to tell
Like the Zumper study, the Apartment List report notes that it’s too early to predict how the COVID-19 pandemic might affect Austin rents (or any rents): “While the impact of COVID-19 is certain to be significant and long-lasting, these effects have yet to appear in many key economic indicators, including our rent index. In the near-term, it’s likely that the volume of moves will likely drop off significantly, due to a combination of shelter-in-place orders, eviction moratoriums, and general uncertainty surrounding the virus and the economy.”
In the long term, the report continues, “the pandemic’s effect on rent prices will depend heavily on the broader macroeconomic landscape. While a recession of some magnitude seems largely inevitable at this point, its exact magnitude and duration are far from certain.”
The Zumper report, meanwhile, notes any downturn could put landlords in a favorable situation. “The rental market tends to be quite countercyclical,” it reads, “so in the event of an economic slowdown, the rental market has historically performed well as landlords spend to maintain their rent rolls and as Americans choose to rent, not buy.”
What does that man for Austin?
Prior to the novel coronavirus pandemic, the market for buying homes in Austin had been heated for past several years and was expected to remain so, with renting is proving an increasingly expensive option for residents who can’t or don’t want to buy. While the city has been ranked among those building the most apartments across the nation and developers get permitted for new multifamily buildings at a steady rate, Austin’s rental market continued to be crunched—meaning, of course, rising rates across the city. That all changed when the COVID-19 pandemic brought a halt to all but essential construction in Austin, and, to bring it all back around, it’s too early to tell which way the rental market will go from here.