Multi-family Consulting / Austin
Austin remains one of the most oversupplied large apartment markets in the country, with effective rents down 7.4 percent in the year ending October 2025 and metro occupancy near 92.7 percent. Q4 2025 deliveries are projected at 2,625 units, the lowest quarterly total since early 2021, setting up a credible recovery window through 2026 and 2027 for operators who control expenses now.
The Austin metro absorbed roughly 23,350 units in the year ending Q3 2025 against 20,898 delivered, the first time in sixteen quarters that demand outpaced new supply. Yardi Matrix put average asking rent at $1,492 in January 2026, down 5.0 percent year over year, while RealPage tracked a 7.4 percent effective rent decline through October 2025. Class C effective rents fell 14.6 percent, while Class A held to a 1.3 percent decline because owners bought occupancy with concessions.
Submarket dispersion is extreme. East Austin led every submarket on deliveries at 3,989 units, which is why concessions along East Riverside and the Plaza Saltillo corridor have been the most aggressive in the metro. Round Rock and Georgetown together took 3,249 units, Cedar Park 2,514, North Central Austin 1,749, and San Marcos 1,571. Outer-ring asking rents sit at $1,399 in Round Rock, $1,409 in Buda, $1,468 in Kyle, and $1,467 in Pflugerville, where the 1,000-unit Merle on Howard began leasing in fall 2025. Only Downtown and West Austin posted positive rent growth, at 4.8 percent and 0.4 percent.
The operator landscape is concentrated. Greystar manages roughly 946,742 units nationally and remains the dominant third-party manager in the metro, while Austin-based RPM Living oversees 241,479 homes and competes directly on Class A lease-ups. ZRS sits at roughly 113,000 units nationally and stays active on Sun Belt Class A. Endeavor Real Estate Group has eighteen Austin properties totaling more than 6,050 units, including the 369-unit Solomon. Trammell Crow Company and High Street Residential opened pre-leasing at 700 River and announced The Block Yard in East Austin, while Riverside Resources, ILM Capital, Roscoe Properties, and Mill Creek Residential all carry meaningful exposure. Investment volume for 2025 came in near $1.3 billion at $176,871 per unit and a 5.5 percent Q3 cap rate, while construction starts dropped to their lowest level since 2011.
Insurance and property tax are doing the most damage to Austin NOI. Travis Central Appraisal District handed apartments a 15.6 percent assessed value increase in 2025, taking the apartment book from $52.98 billion to $61.91 billion before protests pulled it back 4.3 percent. Informal hearings open April 14, the protest deadline is May 15, and ARB hearings run through June. Texas insurance premiums jumped roughly 43 percent per unit at the worst of the hail and freeze cycle, and CBRE tied an 11.1 percent value drop in Houston multifamily to insurance repricing. Premiums on inland Austin Class B and C product still run $700 to $1,200 per unit annually.
Bad debt and turnover are the quieter problems. Travis County eviction filings ran north of 10,500 in 2023, and 2024 set a record with roughly 800 monthly filings in April versus 200 in April 2022. The National Apartment Association tracked a 17.5 percent jump in turnover costs in 2024 and a 4.6 percent rise in leasing expense to $292 per unit, on top of payroll inflation around 3.6 percent. CoStar tracked concessions at 65 percent of Austin properties in 2025, with nearly 75 percent of Class A properties offering at least one concession. Effective rent on a thirteen month lease with one month free sits roughly 7.7 percent below asking. Austin Energy operates as a regulated monopoly, so retail provider switching is unavailable, which makes RUBS design and submeter accuracy the primary levers on utility pass-through.
The areas below show up in most Austin engagements. Scope is set per client based on what is actually needed.
We work the TCAD informal calendar from mid-April, build the income approach with rent rolls, T-12s, and concession-adjusted effective rents, and prepare for ARB hearings in June. The 4.3 percent TCAD average reduction is a baseline we push past with documented concessions.
We benchmark per-unit premiums against the $700 to $1,200 Austin range, evaluate wind and hail deductible buy-downs, and confirm that Texas master programs reflect the Austin risk profile rather than coastal exposure.
We model whether a property is better served burning concessions for occupancy or holding asking rent and accepting slower velocity. East Austin and Round Rock need different answers than the urban core.
We audit screening criteria against current applicant quality, set reserves that reflect Travis County eviction throughput, and rebuild collections so charge-offs hit at twelve to sixteen weeks instead of lease expiration.
We rework on-site headcount around leasing velocity, cross-train maintenance and leasing staff, and evaluate AI leasing tools so the August through September surge stays inside budget.
We audit RUBS allocations and submeter calibration, then close trash, water, and sewer recovery gaps that erode NOI by 1 to 3 percent on most assets.
We determine whether a Class B asset in a heavy-supply submarket should chase rent recovery in 2026 or renovate now while Austin construction labor remains the most available it has been since 2021.
Most credible forecasts put rent stabilization in 2026 and meaningful rent growth not arriving until 2027, anchored by the collapse in construction starts to 2011 levels and a Q4 2025 delivery total of 2,625 units. Owners should underwrite a flat to slightly negative 2026 and model real growth re-entering the system in late 2026 or early 2027, with the urban core recovering first.
SB 840 took effect September 1, 2025 and forces certain Texas cities of 150,000 or more to allow multifamily and mixed-use by right on land zoned for office, commercial, retail, warehouse, or mixed-use, with reduced parking, height, setback, and density limits. Several cities have passed defensive ordinances in response. For existing Austin operators, SB 840 increases the long-run supply threat in commercial corridors, though new starts triggered now will not deliver until 2028 or later.
HOME-1 allowed up to three units on most single-family lots and HOME-2 cut minimum lot size from 5,750 square feet to 1,800 square feet. The first year produced about 436 approved units in duplex and two- to three-unit projects, which is real volume that remains small relative to the 30,002 conventional multifamily units delivered in 2025. The bigger long-run effect lands on small-lot infill competing with Class C garden product in central neighborhoods rather than on 200-plus unit institutional assets.
The figures and references on this page draw from the following industry sources.
We work with owners, operators, and ownership groups on assets and portfolios in Austin-Round Rock. Send a short note about the property or situation and we will follow up.