Austin, brace yourselves for one of the highest rent hikes in the U.S.
Hopefully you’ve invested in residential real estate property in Austin, because 2016 is promising some big numbers. However, if you’re not a homeowner who rents out a property, well, the forecast doesn't look too hot for you.
HomeUnion, a real estate investment management firm, has identified the top 10 metros with the strongest investment home rental growth in the country. Austin comes in at No. 8, with some data that might excite or scare, depending on which side of the spectrum you’re on.
Austin is expecting a 5 percent price increase in 2016 for home rentals, with a projected year-end average rental price of $1,787 for a single-family home. Factors of population, a healthy economy, and steady job growth place Austin in the top 10. Additionally, more people are choosing to rent versus buy due to the lack of affordable housing options, making the demand for rental properties even higher in our city.
"Austin’s presence as the tech hub of Texas supported the fourth fastest growing job market in the country in 2015," says Steve Hovland, manager research services for HomeUnion. "More than one-third of the jobs created in the market during the past 12 months were in the high-paying professional and business services sector, which includes most tech positions. As young tech workers gravitate towards the city center to practice a live-work-play lifestyle, rental demand is very high.
"Apple’s new 1.1 million-square-foot campus also contributed to the optimistic outlook for rent growth in the metro," he adds.
The top three cities on the list are San Jose, California ($3,459 year-end rent forecast, 7.3 percent growth forecast for 2016); Orlando ($1,348 rent, 6.1 percent growth); and Seattle ($4,191 rent, 5.9 percent growth). The only other Texas city in the top 10 is San Antonio at No. 9, with a $1,165 year-end rent forecast and 4.8 percent rent growth.
While the study spells good news for Austin real estate investors, it means bad news for renters. Even so, compared to some of the nation’s struggling cities like Milwaukee, Cleveland, and Detroit, Austin’s economy is strong, and that’s something to be thankful for.