East Austin Multifamily Market Report — Austin, TX

Market Summary

East Austin's multifamily market is at a genuine inflection point — and a compelling one for developers with a 12-24 month horizon. The submarket absorbed the most aggressive supply wave in the nation, with inventory nearly doubling to 30,571 units, and is emerging on the other side with vacancy falling for the first time since 2021. The near-term picture is still tenant-favorable. Concessions of 6-12 weeks free are widespread across Class A product in 78702 and 78725, and net effective rents are 10-20% below asking. Rents are down 4.5% YoY metro-wide — the steepest decline among major U.S. markets. But the leading indicators have turned: absorption outpaced deliveries in H2 2025 for the first time in three years, and construction starts have collapsed 73%. Only 10,000 units are expected to deliver metro-wide in 2026 vs. 31,000 in 2025. The structural thesis for East Austin multifamily is as strong as ever. The submarket's 55%+ renter population (20 points above national average), median age of 34, and walkable lifestyle positioning continue to draw in-migration. AvalonBay's $619M Texas portfolio acquisition — with $187M allocated to Austin — signals institutional conviction that the rent correction is a buying opportunity, not a structural decline. By late 2026, analysts project vacancy retreating to 6-7% and rents returning to positive growth.

Rent Data

Average rent: $1791/SF. Range: $825 - $2995/SF. YoY growth: -4.5%.

Vacancy and Absorption

Vacancy rate: 14.2%. Trend: falling. East Austin multifamily vacancy peaked near 15% in early 2025 after the submarket's inventory nearly doubled — up 92.5% to 30,571 units, making it the highest-growth apartment submarket in the nation. Vacancy has since begun declining as absorption caught up to supply in H2 2025. The correction is sharpest in Class A, where 65% of complexes are offering 6-12 weeks free rent on new leases. Class B and C product has held up better, with value-add assets actually posting positive rent growth (+1.7% and +3.4% respectively). The supply cliff is imminent: construction starts collapsed 73% and 2026 deliveries will drop to ~10,000 units metro-wide vs. 31,000 in 2025. Vacancy is expected to retreat to 6-7% by late 2026.Net absorption: 19,000 SF.

Cap Rates and Comparable Sales

Average cap rate: 5.6%. Range: 4.7% - 6.8%.

• Cielo I + II + Retreat at Wolf Ranch (3-property portfolio): $187,000,000 ($218000/SF), sold 2025-03
• Veranda, 7205 E. Ben White Blvd: $78,000,000 ($215000/SF), sold 2025-09
• Wildcreek Apartments, 1511 Faro Dr: $32,000,000 ($138000/SF), sold 2025-12
• Rise 120, Georgetown: $50,000,000 ($220000/SF), sold 2026-01

Construction Pipeline

Under construction: 15,900 SF. Planned: 10,153 SF. Deliveries next 12 months: 10,153 SF.

Notable Market Activity

• AvalonBay Communities: Acquired 857 Austin-area units for $187M as part of $619M Texas portfolio acquisition from BSR REIT. Major new institutional entrant.
• NRP Group: Top-10 national MF developer building Airport Crossing (256 units) in East Austin. Cleveland-based firm expanding Sun Belt footprint.
• Continental Realty Group: Colorado-based investor entering Austin via Wildcreek Apartments (232 units, 1984 vintage, 63% occupied) — deep value-add play in East Riverside corridor.
• Presidium Group: Breaking ground on Velocity, a 2,700-unit master-planned district on 314 acres in Del Valle / SE Austin — one of the largest MF developments in the metro.
• Compal Electronics: Taiwanese ODM entering Austin with 578K SF across two industrial leases — bringing hundreds of manufacturing jobs to eastern corridor, supporting apartment demand.

Demographics

Population: 2,607,298. Growth rate: 1.8%. Median household income: $105,998. Job growth: 1.4%.