• While higher interest rates led to a sharp decrease in transactions, sales activity in Austin was more resilient than the overall Southwest region and the nation as a whole.
  • A surge in construction activity since the onset of the pandemic led to significant supply-side risk in Austin.
  • To bolster occupancy in an environment with greater competition, many landlords reduced rents and offered steep concessions. This trend was particularly pronounced in the luxury segment.
  • Volatility will persist during the next year as new units in Austin continue to be delivered at an elevated pace. However, in 2024, stronger household formation should support increased absorption.

Additional Insights:

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Austin was until recently one of the hottest apartment markets in the country. However, a boom in development and a softening of operating conditions has made the near-term conditions there difficult, especially in the Class A segment.

Strong Demand, Stronger Supply, one of Lument’s two Q3 2023 market spotlights, was developed in partnership with Rosen Consulting Group. The report surveys what’s happening on the ground in Austin—from capital shifts to vacancy rates.  

Each new quarterly national market report will be accompanied by market spotlights for two metros and it will all be available on our site within the Insights section by selecting “Research,” where it joins other research-based materials, like our recently released multifamily investor sentiment survey report.

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