Texas Market Reports

If you had to sum up the El Paso multifamily market — and to some degree the entire city — in word, it would be “steady.” Though El Paso’s location ensures that impacts of political policies with Mexico can cause immediate disruption in the economy, our commercial real estate markets remain insulated from this activity. Even so, as the city’s jobs and population have grown in tandem with the national economic expansion, El Paso has not yet experienced a true building boom of Class A multifamily product. The city is seeing its renter base become more gentrified, particularly on the west side. In addition, developers in El Paso face the same rising construction costs as builders in other markets. The citywide vacancy rate, which currently stands at about 8 percent, is slowly declining while average asking rents are creeping up. These economic and demographic trends suggest the ceiling for new development of Class A multifamily product in El Paso is quite high. Absorption of new units has remained consistent during this cycle, but as things currently stand, there are only a couple hundred units under construction. Retail Influence Retail frequently follows rooftops, but in El Paso, the two seem to …

As demand for housing increases with Austin’s growing population, all eyes are on the multifamily housing market. But with rents rising as well, pressure on the already-sparse affordable housing stock is more intense than ever.  Traditionally, affordable housing has served as a resource for low-income residents, those who earn at or below 60 percent of the area median income (AMI). Providing affordable housing has become a major priority for Austin’s city council and developers during this cycle. But a growing concern involves the segment of the population caught in the middle: those who may not qualify to live in traditional affordable housing properties, but for whom market-rate apartment prices are getting uncomfortably high.  The solution? Workforce housing.  Rapid Residential Growth Average rent is increasing faster in Austin than in any other major metropolitan city in Texas. This activity is pushing workers out of housing they could afford in areas that are convenient for them and forcing many into long commutes from unfamiliar neighborhoods.  According to industry data, in 2018, rents in Austin rose by 4.4 percent, in contrast to 3.8 percent in Fort Worth, 3.5 percent in San Antonio and 2.7 percent in Dallas. And the squeeze on lower-income residents …

The Austin apartment market is currently experiencing significant growth. Increasing demand is driving more intensive development and developers are addressing tenants’ desire for a better experience.  The result is the development of communities that capitalize on space to the fullest extent. Architects are providing extremely detailed designs of common area “living experiences” before properties are constructed. Examples of such designs include the final positioning of equipment in fitness centers, pool/cabana layouts, rooftop lounges and Zen gardens that are thoughtfully and efficiently planned to maximize the effect while being cost-conscious. The importance of garage layouts and identifying necessary parking needed has increased as we become more dependent on ride-sharing services like Uber and Lyft, as well as Lime and Bird scooters to move around the city. Job, Population Growth The key to the success of new developments and long-term investments is the ongoing population and job growth, future projections of which remain extremely positive. Austin enjoys a prime age (25 to 34) rental percentage that reportedly exceeds 30 percent, approximately 44 percent higher than the national average of 20.9 percent. Additionally, we must take into consideration locals opting to move from single-family homes to rental communities in favor of more services …