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“BREAKING NEWS – Leasing is ON FIRE! – Particularly in the Suburbs! ”

All, we’ve noticed that something is happening in the residential leasing market. It has gotten EXTREMELY competitive among tenants and with a surprising twist – the hottest areas are the suburbs. Take a look at this data set and attached map. These are listed generally as we move from the northern bedroom communities heading closer to the center of town:

Area RRW – 18 Actives – 47 Leased in the last 30 days

Area RRE – 29 Actives – 90 Leased in the last 30 days

Area CLS – 22 Actives – 54 Leased in the last 30 days

Area CLN – 26 Actives – 75 Leased in the last 30 days

Area N – 12 Actives – 19 Leased in the last 30 days

Area NW – 17 Actives – 37 Leased in the last 30 days

Area 2N – 11 Actives – 19 Leased in the last 30 days

Area 1N – 17 Actives – 22 Leased in the last 30 days

Area 1A– 7 Actives –7 Leased in the last 30 days

Area 2 – 17 Actives – 28 Leased in the last 30 days

Area 4 – 34 Actives – 34 Leased in the last 30 days

Area 1B – 25 Actives – 20 Leased in the last 30 days

Area 8E – 18 Actives – 47 Leased in the last 30 days

Note – this boom we’ve noticed started about 2 weeks ago. My numbers above include 30 days back worth of leases, so expect the data to be even more extreme in another 2 weeks! You heard it here first, I think we are scooping the mainstream media by at least 2 weeks on this trend.

WHY is this happening?

It is a “supply side” crunch. Take a look at the first three months of leasing in 2009 vs. the first three months of leasing in 2010. This is the whole Austin Metro:

2009 Jan Leases- 1,071   Active Listings- 2,381

2009 Feb Leases- 981       Active Listings- 2,301

2009 Mar Leases- 1,050   Active Listings- 2,232

2010 Jan Leases- 1,122   Active Listings- 1,862

2010 Feb Leases- 1,051   Active Listings- 1,676

2010 Mar Leases- 1,110   Active Listings- 1,625

You can see that the number of leases has increased slightly, however the number of active listings to choose from is dramatically lower. There could be many reasons, of which I may write another article on, however my best guess today, is that the so called “shadow inventory” of foreclosed homes. These are homes which are delinquent in payment, which the banks are not foreclosing on, or are foreclosing yet not re-marketing and selling. The effect is that these distressed homes are not being bought by investors and consequently not making it to the market as rental homes. Central Texas suburbs generally see a higher percentage of foreclosure and distressed properties, and this may explain why the Leasing supply side crunch is being seen most in the suburbs.

My favorite thing to do is watch for emerging trends in Austin real estate. To schedule your free face to face meeting with me to discuss more about Austin trends and how to make money in real estate investing in Central Texas, give me a call or an email.

Kevin Bown
Goodwin Partners, Inc.
11149 Research Blvd. #100
Austin, Tx. 78759
(512) 658-2419
Kevin.bown@goodwintx.com
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