Will Rents in Austin Continue to Drop?

Question

As a property manager here in Austin Texas I felt and had a pretty strong opinion that the rent prices were plummeting and inventory had stacked up in a way that was setting us up for failure going into the new Year spring and summer for 2026. What I find in the video above is rather shocking.

I felt that as someone who does leasing for a living that we were having to do more to get properties leased. This includes offering incentives, lowering the rate and offering flexible security deposit alternatives. This also includes Investing more in professional photography doing Virtual walkthroughs and Matterports.

The prices have allegedly not moved and are very similar to last year statistics. Am I just a bad property manager?

What is everyone else seeing?

Aaron Gordy · Answer

Interesting. It seems that over supply of rental units is working its way out. I know some pockets of the metro that are doing very well, still and that one apartment community in particular is sitting at 96%.That is in the central part of the city, though. Location location location

Joe Scaparra · Answer

I am just a small fry in the Austin MSA.  I own/manage 14 units in the areas from Georgetown to Austin.  I have been doing this for the last 20 years.  Last year was the first time I have ever lowered rents so as to limit vacancies.  In the past the rental market was so strong that once I received a 30 day notice of non-renewal, I would begin to advertise and I would have a move in one day after move out usually.  I would have to stop the advertising after a week as I would get tooooooo many applications.  Not NOW!

It not because you are a bad property manager that you are having trouble finding qualified tenants.  In the Austin MSA the developers OVER BUILT apartment complexes.  Just a few years ago rent pricing was exploding to the upside.  Developers saw that and wanted that action. It takes 3-5 years to bring on a complex and they overbuilt.  How do I know that!!  Most apartment complexes are sitting at 70-85% occupied, but even that number is not indicative of paying tenants.  Many are delinquent.   New complex permits and SFH developers are now on the sideline and we will begin to experience a shortage in about 3-5 years.  It will take a while to work through this.  The problem is not just the number of tenants looking but the quality of the tenants.  Most apartment complexes have GREAT move in incentives.  Anywhere from one month to six weeks free and very low to no down payment if YOU HAVE GOOD CREDIT.