Downtown Austin Multifamily Market Report — Austin, TX

Market Summary

Downtown Austin's multifamily market is the metro's crown jewel — and its most complex story. Average rents of $3,327/month are more than double the metro average, and growing at +7.66% YoY while the broader market declines at -4.5%. The Seaholm District commands the highest 1BR rents at $4,581/month, followed by the Warehouse District at $3,688. Over half of downtown rentals exceed $3,000/month. The skyline tells the story of the pipeline: Waterline (74 stories, 1,025 ft — tallest building in Texas) will deliver 352 luxury units in Q4 2026. Paseo (48 stories, 557 units) completed on Rainey Street in late 2025. The Modern Austin (56 stories, 319 condos) and Residences at 6G are already leasing at rents up to $31,750/month. A 350-foot interim height cap enacted in November 2025 will constrain future downtown tower starts. The investment thesis is straightforward: downtown Austin has an outsized share of the metro's highest-income renters ($154,867 median household income, 52% college-educated), a Walk Score of 90-99, and a pipeline that's effectively shut down after 2026. The concession cycle (6-12 weeks free on Class A) is creating an entry window for operators who can underwrite to net effective rents. Cap rates at 4.7-5.1% for Class A reflect institutional conviction that downtown Austin's luxury rental market will tighten meaningfully as the supply wave recedes.

Rent Data

Average rent: $3327/SF. Range: $1849 - $6424/SF. YoY growth: 7.66%.

Vacancy and Absorption

Vacancy rate: 14.2%. Trend: falling. Downtown Austin's luxury multifamily market is a tale of two dynamics: record concessions coexisting with genuine rent growth. Average downtown rents hit $3,327/month — more than double the metro average of $1,530 — and are growing at +7.66% YoY while the broader metro declines. The paradox is explained by the concession cycle: 75% of Class A properties are offering 6-12 weeks free rent, but the underlying asking rents are rising as newer, higher-quality product (Waterline, Paseo, Residences at 6G) resets pricing expectations upward. Metro-wide vacancy fell 150 bps to 14.2% in Q4 2025 — the first annual decline since 2021 — as demand outpaced supply for the first time. With construction starts at a 10-year low and 2026 deliveries projected to drop 74%, downtown is positioned for meaningful tightening through late 2026.Net absorption: 19,000 SF.

Cap Rates and Comparable Sales

Average cap rate: 5.1%. Range: 4.7% - 5.8%.

• 3Waller, 710 E. 3rd St (near Rainey): $55,000,000 ($212000/SF), sold 2024-06
• The Catherine, 214 Barton Springs Rd: $90,000,000 ($300000/SF), sold 2022-12
• Cielo I + II + Retreat at Wolf Ranch (3 properties): $187,000,000 ($218000/SF), sold 2025-03
• The Dalton, Pflugerville: $75,000,000 ($214000/SF), sold 2025-11

Construction Pipeline

Under construction: 2,600 SF. Planned: 1,000 SF. Deliveries next 12 months: 1,500 SF.

Notable Market Activity

• Waterline / Lincoln Property Co.: 74-story supertall topped out at 1,025 ft — tallest building in Texas. 352 luxury apartments on top 33 floors. Kairoi Residential marketing before Q4 2026 opening.
• Paseo / LV Collective: 48-story, 557-unit tower completed on Rainey Street. Includes ROOST apartment hotel (59 keys) opening January 2026.
• Residences at 6G: Austin's tallest residential tower delivered 2025. Rents range from $2,633 to $31,750/month — setting new ceiling for Austin luxury rental market.
• Placemakr: Acquired 3Waller (259 micro-units at 710 E. 3rd St, near Rainey) — flex living/hospitality hybrid operator entering Austin downtown market.
• 350-ft Height Cap: Interim 350-foot height limit enacted for all CBD development plans submitted Nov 3, 2025 through early June 2026 — constraining future tower pipeline.

Demographics

Population: 10,503. Growth rate: 1.8%. Median household income: $154,867. Job growth: 1.4%.