Austin rent prices fall as COVID-19 impacts local housing market
The impact of COVID-19 has not been lost on Austin's hot housing market — including the rental sector.
When the pandemic hit Texas, Austin's upward trend of rent prices stopped, and in June, the price of a one-bedroom unit in Austin fell 0.31 percent from the previous month to a median $1,291. Two-bedroom units saw a bigger dip — 0.7 percent — to a median price of $1,563.
These losses are even more significant because they have occurred during the traditionally strong summer rental season. Here are some reasons behind those numbers.
Landlords are seeing less traffic amid social distancing and stay-home orders. Those that were ready to make a move are, in many cases, waiting until the pandemic is less of a factor.
One caveat here is that rental marketplaces have quickly ramped up their virtual real estate tour capabilities, and a number of would-be renters are doing more of the process online. People are also starting to work to sell houses online.
Still, increased traffic on rental websites has not made up for the loss in traditional onsite apartment shoppers, and many landlords have not yet embraced these new virtual capabilities.
In order to fill apartments, some landlords are offering concessions and making deals they would not have pre-pandemic. One condo renter recently reported that he was able to negotiate a three-year lease for new construction in a very hot area, even though he did not want to move in until September. The landlord even agreed to leave the property vacant (without trying to find an interim tenant) until the fall.
The eviction landscape is changing quickly, and during the pandemic’s first wave, many governmental units simply banned evictions. Mayor Steve Adler extended Austin's eviction moratorium until July 25. And just last week, Travis County made the same extension.
More housing market trends
As CultureMap previously reported, the Austin-area housing market has seen dramatic changes due to COVID-19. In April 2020, residential home sales in the Austin-Round Rock metro fell a significant 18.3 percent. Active listings also fell 7.3 percent, and total housing inventory fell to 2.1 months.
During the pandemic, many homeowners simply do not want large groups of people in their homes. And, as seen with potential renters, many homebuyers do not want to take the risk of increased social interaction that naturally comes with house hunting.
Low mortgage interest rates — many below 4 percent — may be curbing the issue of less buyer traffic, but the positive effect of lower rates is being impacted by more stringent credit standards. Some buyers have moved to the sidelines completely, as they feel a housing crash may be imminent.
COVID-19 has put the brakes on the traditionally hot Austin housing market. As the pandemic continues, we expect the Austin real estate market to remain cooler than usual.