Austin sits at an inflection point between midsize city and world-class tech hub, which has its advantages and disadvantages. On one hand, it boasts a strong economy that helped it recover faster from the pandemic’s woes, but on the other it faces a deepening housing affordability issue, as developers struggle to work with an outdated land code to keep up with elevated demand. Rent growth mirrors the robust demand, up 0.6 percent on a T3 basis through January, to $1,694, as does the occupancy rate in stabilized properties, up 230 basis points year-over-year through December, to 95.8 percent.
Austin is one of the few metros that has managed to recover jobs lost during the pandemic. The unemployment rate stood at 2.9 percent in December, surpassing both the state (5.0 percent) and the U.S. (3.9 percent) averages. The job market posted a 7.4 percent expansion, or 85,800 jobs, in the 12 months ending in November, outperforming the 4.6 percent national rate. Professional and business services led growth (29,900 jobs), sustained by the plethora of tech firms that moved into the metro. With several billion-dollar projects underway, Austin has strong prospects for a sustained economic expansion.
Developers delivered 1,075 units in January 2022 and had 37,813 units under construction, continuing the accelerated pace of deliveries, which last year marked the best level of the decade. Multifamily sales recorded a new high of $4.3 billion in 2021.