Rising home prices put pressure on Austin rental market

​​​​AUSTIN – In its fourth quarter 2015 apartment market report, Marcus & Millichap says Austin is the most expensive residential market in the state and that a steady, strong rate of growth for single-family home prices will fos​​ter high demand for apartments through the remainder of the year.

The firm’s other projections for 2015:

• Contractors will deliver 12,100 units during 2015, matching last year’s completions. The pace of development is beginning to slow as permitting activity and construction starts reflect reduced activity in 2016.
• Vacancy will reach 4.3 percent by year end, a decrease of 30 basis points year over year as nearly 11,000 apartments are absorbed. In 2014, vacancy ticked up 40 basis points.
• Rent growth will remain strong through the end of the year. The average effective rent will reach $1,158 monthly by year end, an increase of 7.3 percent from 2014. The average effective rent grew 5.5 percent last year.​