Austin Apartment Market Slows In Second Quarter

FOR IMMEDIATE RELEASE

Contact:
Kathryn Koepke
Manager, Market Research
koepke@poconnor.com
713-375-4239

Scott Sherrill
Director of Marketing 
ssherrill@poconnor.com
713-375-4264 

Houston, TX (August 2, 2007) - Despite Austin's robust first quarter postings, multifamily demand slowed slightly during the second quarter of 2007. Overall absorption totaled 253 units, down from 605 units in the first quarter and overall occupancy fell 0.32 points over the quarter to 92.98 percent.

This is according to the second-quarter Austin Apartment Market Update report by O'Connor & Associates, the Houston-based real estate consulting firm and leader in apartment market research data in Texas. The report tracks the growth of apartment living in the Austin and surrounding areas.

Austin area classes A, B and D housing experienced positive quarterly absorption rates again this quarter. Class A had the strongest gain of 357 units. Class B absorption slowed but still posted a gain of 71 units. Class C properties posted the only absorption loss for the quarter with -248 units absorbed. Class D properties absorbed 4443 units, bringing the annual absorption up to 150 units for that level. The Northwest submarket posted the highest absorption gain of 146 units. The Southeast submarket experienced the weakest demand with –117 units absorbed.

Austin area apartment occupancy fell from last quarter, down 0.32 points overall. On average, apartments in Austin show a 92.98 percent occupancy rate. Class A properties decreased 0.56 points to 92.57 percent. Experiencing growth for two consecutive quarters, Class B gained 0.15 points to 94.08 percent. Class C fell for the second straight quarter, down 0.91 points to 91.67 percent. Class D grew a healthy 1.13 points to 93.70 percent. The highest occupancy levels were in the UT Campus area at 98.07 percent, followed by Round Rock at 96.25 percent. Cedar Park/Leander and Georgetown had the lowest occupancy rate at 88.13 and 88.40 percents, respectively.

Despite a slowing market, rental rates increased $0.008 per square foot (psf). This brings the average rent to $0.958 psf, the highest level since the first quarter of 2003. Class A decreased slightly by $0.001 psf to $1.050 and $0.992 psf, respectively. Class B rates increased $0.011 to $.903 psf. Class C rent posted a $0.016 increase, bringing the average to $0.908 psf. Class D properties gained $0.005, bringing the average rate to $0.786 psf. The highest overall rates by submarket were found in Downtown at $1.462, followed by West at $1.196. The lowest rents were in Lockhart submarket at $0.619 psf.

Austin has a total of 658 operating or under-construction projects greater than 25 units with a total of 141,761 units. Class A properties make up 42 percent, Class B make up 36 percent, Class C make up 19 percent and Class D make up three percent.

For a complete report on the Austin apartment market, visit http://www.poconnor.com/apartment_market_update/austin_2Q_2007.html. The report measures demand (absorption), occupancy, rates and apartment inventory.

About ApartmentLink
ApartmentLink is your best source for apartment market data in Houston, Dallas/Ft. Worth, Austin and San Antonio. With information on owners, occupancy, rent, ammenities, detailed property information, comparable information, and much more, ApartmentLink provides vital apartment information for on-site managers, vendors, brokers, owners and investors. The database is available online at oconnordata.com.

Ask about your FREE 10-Day trial for the most accurate online Texas apartment data today! Click here to sign up or contact Heather Wiesner at 713-375-4262.

About O'Connor & Associates
O'Connor & Associates, a Texas-based national real estate service firm providing appraisals, market research, cost segregation studies and federal and ad valorem tax reduction services, has been in business since 1974 and has more than 40,000 clients. Patrick O'Connor, MAI, president of O'Connor & Associates since 1983, is frequently acknowledged by national publications as a respected source of information on real estate trends. Visit www.poconnor.com.

ApartmentLink is your best source for apartment market data in Houston, Dallas/Ft. Worth, Austin and San Antonio. With information on owners, occupancy, rent, amenities, detailed property information, comparable information, and much more, ApartmentLink provides vital apartment information for on-site managers, vendors, brokers, owners and investors. The database is available online at oconnordata.com.

Ask about your FREE 10-Day trial for the most accurate online Texas apartment data today! Click here to sign up or contact Heather Wiesner at 713-375-4262.