AUSTIN | Misc. Discussions - No Politics

[wwmiv]

Originally Posted by Green Country

As I stated, the numbers are assuming current trends continue.

I didn't see an absorption rate that tracks close to the delivery rate. That does not exist. In the first 9 months of 2023, the CBD delivered 298 and absorbed only 243. Even worse, Metro-wide, 11,105 were delivered and only 5,727 were absorbed. There is nothing to make one think absorption will expand as more units are delivered.

The vacancy rate decrease you saw in the Cushman Wakefield report was year over year (3rd Q 2022 vs 3rd Q 2023). I did the math to see what happened in the first 9 months of 2023. 298 units were delivered; only 243 units were absorbed (81.54% occupied). 81.54% occupancy is lower than the current occupancy of 88.43%, so, yes, the deliveries and absorption that occurred in the first nine months of 2023 resulted in a lower occupancy rate.

You are putting way too much emphasis on a two pager and misrepresenting it by calling that a report.

[paul78701]

Originally Posted by IluvATX

What is your obsession with Austin vacancy rates? You obviously don’t live in Austin and your other posts are quite trollish. I just don’t understand your intention here.

Seems like you answered your own question here. It looks like his intention is to be a troll.

[Green Country]

Texas Apartment Markets Could Be Courting Disaster As Oversupply Fuels Rent Declines

The impact of oversupply is most acute in Austin, both statewide and nationally, according to the data. About 40,000 units are under construction in the state's capital city, or roughly 14% of existing inventory. Meanwhile, rent growth has declined more than 5% year-over-year.

Austin's supply problem is temporary, said Marcy Phillips, senior vice president of real estate development for Ryan Cos. Construction will be minimal over the next couple of years, giving the market time to absorb the excess supply coming online in the interim.

"This will fall off a cliff, with virtually no supply in 2026 and beyond," she said in an email. "That is an opportunity for rental increases."

https://www.bisnow.com/dallas-ft-wor...m_medium=email

[Riverranchdrone]

Originally Posted by Green Country

Texas Apartment Markets Could Be Courting Disaster As Oversupply Fuels Rent Declines

The impact of oversupply is most acute in Austin, both statewide and nationally, according to the data. About 40,000 units are under construction in the state's capital city, or roughly 14% of existing inventory. Meanwhile, rent growth has declined more than 5% year-over-year.

Austin's supply problem is temporary, said Marcy Phillips, senior vice president of real estate development for Ryan Cos. Construction will be minimal over the next couple of years, giving the market time to absorb the excess supply coming online in the interim.

"This will fall off a cliff, with virtually no supply in 2026 and beyond," she said in an email. "That is an opportunity for rental increases."

https://www.bisnow.com/dallas-ft-wor...m_medium=email

I have been seeing this story for awhile. Always pushed from companies that own apartments. This is just an excuse to justify their overpriced so called luxury apartments. With rental prices still double to triple the price they should be, we are in no way over supplied but in fact with how fast people are still gobbling up apartments as soon as they open, we are still way under supplied.

[Green Country]

Originally Posted by Riverranchdrone

I have been seeing this story for awhile. Always pushed from companies that own apartments. This is just an excuse to justify their overpriced so called luxury apartments. With rental prices still double to triple the price they should be, we are in no way over supplied but in fact with how fast people are still gobbling up apartments as soon as they open, we are still way under supplied.

The reality is exactly the opposite of what you have stated. Anybody pushing to increase (or maintain high) rents, is going to try to convince us that apartments are in short supply, not over-supplied.

Further, the reality does not show apartments being gobbled up as soon as they are open. Metro-wide, in the first 9 months of 2023, 11,105 new apartments were delivered; only 5,727 were absorbed.

[ILUVSAT]

It is quite unwise to only analyze data from a single year. The dynamics are far too complicated to garner any sort of true/overall view in doing so.

Additionally, as stated in that article, one is not going to see many starts in the coming years - as the market moves to fill vacancies. If you really want to stir the doom-and-gloom pot - watch for foreclosures. That will tell you things are, in fact, turning for the worse.

Most articles I have read on the subject are simply stating facts - there are a lot of units under construction (even more going through the permitting process). However, one common tone with these articles is that few in the industry are sounding any alarms at the moment. The units currently U/C will come online over the next few years at a pace of roughly 15,000 or so per year.

[Green Country]

Originally Posted by ILUVSAT

It is quite unwise to only analyze data from a single year. The dynamics are far too complicated to garner any sort of true/overall view in doing so.

Additionally, as stated in that article, one is not going to see many starts in the coming years - as the market moves to fill vacancies. If you really want to stir the doom-and-gloom pot - watch for foreclosures. That will tell you things are, in fact, turning for the worse.

Most articles I have read on the subject are simply stating facts - there are a lot of units under construction (even more going through the permitting process). However, one common tone with these articles is that few in the industry are sounding any alarms at the moment. The units currently U/C will come online over the next few years at a pace of roughly 15,000 or so per year.

Of course there are many moving pieces and predicting the future is always hazardous. All overbuilt situations are "temporary", even the overbuilt downtown Dallas office market, depending on how flexible one is in their use of the word temporary. Posting facts is what I've done, and asked if there was any concern present in the real estate community. The reactions on this thread speak volumes.

[East7thStreet]

I think most people think the "over supply" stats are misleading because if you live in Austin you know our real estate market has more of a "over priced" problem....and hope the new developments will lead to lower prices. There will be no problem filling them if prices come down.

In addition to Austin I work in Bell, Burnet, and other surrounding communities and it's amazing the amount of people who tell me they would love to live in Austin but it's just too expensive.

[Green Country]

Austin Rents Lose Steam, with second-steepest decline in December among major U.S. metros

"Just as it is a buyer's market in Central Texas' single-family housing market, so too is it a renter's market in the Austin-area apartment market."

"Rents in Austin dropped 12.5% in December compared with December 2023, according to the study [by Rent.com], which tracked rates in the nation's 50 largest metros."

"A separate study released Thursday said Austin is still facing the effects of a glut of apartment units. Of the 12 Sunbelt markets MRI ApartmentData tracks, Austin had the lowest level of occupancy (86%) in January, and it saw the biggest decline in rents over the past 12 months. . . . For context, Austin's occupancy at the end of 2021 was almost 92%.)"
https://www.statesman.com/story/busi...h/72480308007/

[paul78701]

Originally Posted by Green Country

Austin Rents Lose Steam, with second-steepest decline in December among major U.S. metros

"Just as it is a buyer's market in Central Texas' single-family housing market, so too is it a renter's market in the Austin-area apartment market."

"Rents in Austin dropped 12.5% in December compared with December 2023, according to the study [by Rent.com], which tracked rates in the nation's 50 largest metros."

"A separate study released Thursday said Austin is still facing the effects of a glut of apartment units. Of the 12 Sunbelt markets MRI ApartmentData tracks, Austin had the lowest level of occupancy (86%) in January, and it saw the biggest decline in rents over the past 12 months. . . . For context, Austin's occupancy at the end of 2021 was almost 92%.)"
https://www.statesman.com/story/busi...h/72480308007/

Nobody is arguing that rents aren't going down. The disagreement is with the idea that we're "overbuilt". If you read the article, it clearly states that rents are STILL much higher than they were:

Despite the current declines, "Austin rents remain considerably higher today than amid pre- and early-pandemic lows," Gardner wrote. The recent drops "are more indicative of growing pains associated with the city’s rapid expansion," according to experts at Rent.com.

We haven't even normalized yet, let alone become "overbuilt". Let me know when rents drop back to that level, then MAYBE the "overbuilt" discussion becomes tractable.

[Green Country]

Originally Posted by paul78701

Nobody is arguing that rents aren't going down. The disagreement is with the idea that we're "overbuilt". If you read the article, it clearly states that rents are STILL much higher than they were:



We haven't even normalized yet, let alone become "overbuilt". Let me know when rents drop back to that level, then MAYBE the "overbuilt" discussion becomes tractable.

Indeed I read the article, including this: ". . . Austin is still facing the effects of a glut of apartment units"

And this: "It becomes apparent that Austin's low overall occupancy is a function of its large number of new units delivered in relation to units leased. . . This illustrates the oversupply that is being experienced in Austin."

And this: "The downturn, partly due to an oversaturated housing supply . . ."

And this: ". . . an oversupplied market will continue to drive rent declines . . . "

[Riverranchdrone]

Originally Posted by Green Country

Indeed I read the article, including this: ". . . Austin is still facing the effects of a glut of apartment units"

And this: "It becomes apparent that Austin's low overall occupancy is a function of its large number of new units delivered in relation to units leased. . . This illustrates the oversupply that is being experienced in Austin."

And this: "The downturn, partly due to an oversaturated housing supply . . ."

And this: ". . . an oversupplied market will continue to drive rent declines . . . "

This is 100% incorrect. There is no over supply. There is no oversaturation. There is no glut of unit. This is totally incorrect and very misleading. Austin is in no way over saturated. In fact Paul is correct in saying we have finally built enough units to finally stop the price gauging that these apartments have been charging for years. These Apartments and houses caught up to demand and are still selling out very quickly. Prices are not tanking but going back to normal numbers. We do not have an excessive amount of apartments but just the right number. We should not stop building because people are still moving here and new units are still under built.

[wwmiv]

Originally Posted by Riverranchdrone

This is 100% incorrect. There is no over supply. There is no oversaturation. There is no glut of unit. This is totally incorrect and very misleading. Austin is in no way over saturated. In fact Paul is correct in saying we have finally built enough units to finally stop the price gauging that these apartments have been charging for years. These Apartments and houses caught up to demand and are still selling out very quickly. Prices are not tanking but going back to normal numbers. We do not have an excessive amount of apartments but just the right number. We should not stop building because people are still moving here and new units are still under built.

This. Green_Country is a shill for the housing price gaugers.

[The ATX]

Originally Posted by wwmiv

This. Green_Country is a shill for the housing price gaugers.

Yes, he works in CRE. So his view point is that an increasing supply that favors renters is a bad thing.

[wwmiv]

Originally Posted by The ATX

Yes, he works in CRE. So his view point is that an increasing supply that favors renters is a bad thing.

There’s a reason the Torrah, the Bible, and the Qaran all outlaw rentierism and usury. In America, those things are legal.

[KevinFromTexas]

Charley Crockett filmed a promotional video at Mustang Pawn on South Congress for a new single he's releasing. They used the exterior and interior. They show him buying a guitar there. I wish I could find the clip on Youtube, but it's only on Facebook. This place is located a mile from me, and it's been there forever. He's also using the exterior for the album cover and also for the backdrop for some of the performances of the song he's doing, including on Jimmy Kimmel Live recently.

Google maps
https://www.google.com/maps/uv?pb=!1...9MJbWO7A&hl=en

• Video Link• Video Link

I snapped this photo of it on the way home tonight.

[Green Country]

Originally Posted by Riverranchdrone

This is 100% incorrect. There is no over supply. There is no oversaturation. There is no glut of unit. This is totally incorrect and very misleading. Austin is in no way over saturated. In fact Paul is correct in saying we have finally built enough units to finally stop the price gauging that these apartments have been charging for years. These Apartments and houses caught up to demand and are still selling out very quickly. Prices are not tanking but going back to normal numbers. We do not have an excessive amount of apartments but just the right number. We should not stop building because people are still moving here and new units are still under built.

https://www.rent.com/research/oversupplied-rental-market-behind-austins-dramatic-rent-swings/

Whether or not you choose to acknowledge it, the elephant still exists, right there in the middle of the room.

https://www.statista.com/statistics/...growth-austin/

December 2019 (pre-pandemic) average rent: $1291
December 2023 average rent: $1501. Yes, higher, but one also must take note of the other elephant in the room; substantial inflation over that time. In constant (inflation-adjusted) dollars, the December 2019 rent would be about $!539 at the end of 2023. So, adjusted for inflation, rents are slightly lower now than before the pandemic, and continue to drop.

[Riverranchdrone]

Originally Posted by Green Country

https://www.rent.com/research/oversupplied-rental-market-behind-austins-dramatic-rent-swings/

Whether or not you choose to acknowledge it, the elephant still exists, right there in the middle of the room.

https://www.statista.com/statistics/...growth-austin/

December 2019 (pre-pandemic) average rent: $1291
December 2023 average rent: $1501. Yes, higher, but one also must take note of the other elephant in the room; substantial inflation over that time. In constant (inflation-adjusted) dollars, the December 2019 rent would be about $!539 at the end of 2023. So, adjusted for inflation, rents are slightly lower now than before the pandemic, and continue to drop.

Ideal rent should be about half that. The super high rents show that demand is still much higher than demand. The huge increase in evictions is also indicative that rent is still way too high. We need a lot more supply to get prices down to historical averages.

[Green Country]

Originally Posted by Riverranchdrone

Ideal rent should be about half that. The super high rents show that demand is still much higher than demand. The huge increase in evictions is also indicative that rent is still way too high. We need a lot more supply to get prices down to historical averages.

Any source for the claim of a huge increase in evictions that was caused by high rents? The data I’ve seen shows evictions merely returning to their pre-pandemic (pre-eviction-moratorium) numbers. https://www.texastribune.org/2024/02...affordability/

Of course evictions increased when the moratorium was lifted. But they seem to have settled at about the usual rate.
https://evictionlab.org/eviction-tracking/austin-tx/

Just a quick reminder, from the initial inquiry, my primary overbuilding concern is the downtown market.

[ahealy]

Ok I swear I'm not trynna troll here, but hear me out. I went to Dallas this weekend for a wedding and stayed at the Virgin in the design district. In short, Austin really needs to model itself from Dallas AND CATCH UP.

The architecture is of course old money / oil / tech boom money, but good god it's so much better than here. Even the nearby (new) residential towers didn't have parking podiums, but instead, separate garages that can someday be torn down/converted if necessary. New construction was also INTERESTING and not value engineered to remove the smallest details or use the cheapest materials. I so wish our skyline were similar and I'm nervously holding my breath for Waterline to be the main stunner of TX....but we'll see about that one. The lighting on their towers actually looked classy and glitzy, compared to our mostly lazy approach.

Speaking of detail, every sign or neighborhood has some flair or identity to itself. I think we're onto a good start with SOCO, 2nd street, 6th / RR, but we need to flesh out a more cohesive USE for our different hoods. I'd personally love to see a design district here or something similar for trade businesses.

Lastly, this one comes with time, but it was so amazing to see taller buildings outside of downtown. We attended a wedding in University Park on the top floor of some office tower and I felt so envious and wish we had something like that in Uptown/Domain. Austin deserves multiple skylines throughout the city and I feel we're on the way as the NIMBY tinfoil-hat neighborhood association grip loosens from CC.

PS. I think you can boil my SSP gripes and wishes down to a few things:

More creative new builds, quality build standards and way better lighting
No more parking podiums
An actual art museum
Project Connect
An observation bar/dining establishment

Thanks if you made it this far !