Before the pandemic, Tyson Bird and his girlfriend decided to upgrade from their one-bedroom apartment in Brentwood to a two-bedroom place in the Riverside neighborhood, where they felt they could find a newer building with more affordable rates than in other parts of town.
When the first COVID-19 cases were reported in March, they were still looking. Although the lockdown and subsequent restrictions meant they couldn't tour places in person, the couple was pleasantly surprised by what they found.
"The prices were a lot lower than we expected," Bird said.
So low, in fact, that they ultimately moved into a two-bedroom place in Clarksville, which they originally thought was out of their budget.
"We expected to pay a couple hundred more," Bird told Austonia of their new place. Instead, he and his girlfriend pay $85 more a month for double the square footage in a building 30 blocks closer to downtown. "It was a no-brainer," he said.
The couple is not alone in their discovery.
The average monthly rent of Austin-area apartments fell from more than $1,300 in March to less than $1,225 last month, according to the latest report from ApartmentData.com. Occupancy rates are showing a similar decline.
Cindi Reed, regional vice president of ApartmentData.com, said other Texas metros are seeing their rental markets start to stabilize eight months into the pandemic—but not Austin's.
"Our rates were greatly overinflated, in my opinion," Reed said, explaining that local rents had long been the most expensive in the state. "Our fall was going to be bigger because we were higher."
Additionally, Austin has a greater proportion of its apartment stock under construction or proposed than other cities. Currently, there are nearly 44,000 units in development across 150 properties.
New buildings tend to be in the Class A—or most luxurious—category and cater to recent arrivals lured to Austin by jobs in the tech sector and other booming industries.
"That's what drives us," Reed said. "Absorption is high when job growth is high."
But many major employers—including Amazon, Apple and Indeed—have said they don't plan on returning to their offices until next year.
Without new arrivals to fill these units, 61% of Class A properties and 41% of Class B properties are offering incentives in the form of discounted rent or other deals, Reed said.
Additionally, despite this historic downturn, many tenants are struggling to stay in their homes because of lost jobs and other financial hardships.
But not everyone is frustrated.
"Renters can utilize some of these benefits right now," Blair said.
Like Bird, some Austin renters may find that they can afford a bigger apartment in a more desirable location for around the same price.
Others, spurred by the low interest rates and more flexible remote work options precipitated by the pandemic, may seek out homeownership.
"There is a migration from the inner core of the city, (where people are) paying outrageous downtown rents, to the outer suburban areas, where things are more affordable," Reed said. "If you're paying $2,500 a month in rent downtown, you can buy a beautiful house for that (same amount) and build equity."
Despite the pandemic, the local housing market remains scorching.
The median home price in the city of Austin hit an all-time high of $435,000 last month—a nearly 15% year-over-year increase—according to the Austin Board of Realtors' latest report.
But the rental cool down appears here to stay.
"Our previous place is still listed," Bird said. "Right now, it's $100 less (a month) than we paid the last two years."
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