AUSTIN (KXAN) — A report using September data shows out of the 10 biggest tech cities in America, Austin has seen the largest year-over-year rent increase, beating out metros like Los Angeles and New York City.
“Austin has, in a sense, the honors of being the city with the fastest rent appreciation across the major metros that we track,” said George Ratiu of economic research with Realtor.com.
The report released by Realtor.com says rent in Austin grew 25.3% in September 2021 when compared to September of last year. The next closest city is Seattle, which saw a year-over-year increase of 16.7%.
Ratiu attributes the surge in renters and rent to more than 150 companies moving to the area, bringing more than 15,000 jobs and a low unemployment rate.
“The desire for larger spaces is actually driving a lot of that in this age of remote work. It obviously turns out that most of us want more space,” Ratiu said. “I think Austin absolutely has a clear advantage, as we’ve seen many people from Seattle, from San Francisco, from Los Angeles and even New York relocate to Austin for the local economy, for the quality of life and ultimately the affordability.”
Rent in Austin has even surpassed pre-pandemic numbers, with March 2020 rent prices sitting at $1,367 and September 2021 prices measured at $1,647. That’s an increase of 20.5%, the report says.
Realtor.com also points out Austin didn’t experience too much of a pandemic decline compared to other big tech hubs.
The lowest month for rent in Austin was October 2020, according to the website’s report, and the lowest rent got during the pandemic was $1,300. That’s a 4.9% decrease compared to March 2020.
Other tech hubs like Los Angeles, Seattle and Washington, D.C. saw dips in the double digits when comparing their lowest pandemic rent value to March 2020 numbers.
September 2021 Rental Data – 10 Biggest U.S. Tech Hubs
|Metro||Pre- COVID Rent (Mar 2020)||COVID Low Month||COVID Low Rent||COVID Low vs. March 2020||Sept. 2021 Rent||Sept. 2021 Rent YoY||Sept 2021 vs. COVID Low||Sept. 2021 vs. March 2020|
|Los Angeles, Calif.||$1,938||Dec-20||$1,700||-12.3%||$2,095||13.8%||23.2%||8.1%|
|New York, N.Y.||$1,976||Dec-20||$1,836||-7.1%||$2,075||-3.8%||13.0%||5.0%|
|San Francisco, Calif.||$1,650||Dec-20||$1,593||-3.5%||$1,695||5.5%||6.4%||2.7%|
|San Jose, Calif.||$2,480||Jan-21||$2,242||-9.6%||$2,517||10.8%||12.3%||1.5%|
Experts say costs could come down next year, with about 22,000 rental units currently under construction. Last year, there were about 10,000 units added to the market.
“We’re at a level much higher than where we’ve been in recent history, and that should help provide a little bit more relief to renters,” said Central Texas economist Sam Tenenbaum, who is also director of analytics with CoStar Group.
Tenenbaum says people shouldn’t expect another 20% increase next year. He expects the market to get back to normal levels as the supply increases.
The place he’s seen the weakest rent growth is in Caldwell County, where rents are up 8% year over year, which Tenenbaum says is still obviously quite significant.
He also says Bastrop, Caldwell County, San Marcos and central Austin (near the University of Texas at Austin) aren’t seeing much of a rent increase.