South Austin Multifamily Market Report — Austin, TX

Market Summary

South Austin is the metro's most resilient multifamily submarket — and arguably the best positioned for the recovery. While East Austin and downtown absorbed the brunt of the supply wave (East Austin's inventory nearly doubled), South Austin's development has been constrained by limited land, established neighborhoods, and zoning resistance along corridors like South Lamar, South Congress, and Zilker. The result: tighter vacancy, less concession pressure, and positive rent growth in Class B and C product. The submarket's appeal is structural, not cyclical. South Austin consistently outperforms in stabilized occupancy (94%+ per RealPage), driven by a walkable, lifestyle-oriented tenant base that values proximity to Barton Springs, Zilker Park, and the SoCo retail corridor over the newest Class A amenities. Median rents of ~$1,650/month — roughly in line with the metro average — offer value relative to downtown's $3,327 while delivering a better location than suburban alternatives. Value-add capital is flowing here aggressively. Continental Realty Group's acquisition of Wildcreek (232 units, 1984 vintage, 63% occupied at $138K/unit) exemplifies the play: acquire Class C product at a steep discount, renovate to Class B standards, and capture the $300-400/month rent spread. With the supply pipeline effectively shut down (construction starts at a 10-year low), South Austin's existing stock becomes increasingly scarce — and increasingly valuable.

Rent Data

Average rent: $1650/SF. Range: $1100 - $2800/SF. YoY growth: -3.5%.

Vacancy and Absorption

Vacancy rate: 12.8%. Trend: falling. South Austin's multifamily market is performing slightly better than the metro average, benefiting from its established residential character, proximity to downtown, and lifestyle appeal along South Lamar, South Congress, and Zilker corridors. Only Downtown/University and South Austin submarkets surpassed 94% stabilized occupancy in late 2025 (RealPage data), making South Austin one of the tighter residential submarkets. The area has seen less new Class A supply than East Austin or downtown, insulating it somewhat from the concession wave. Class B and C product — the backbone of South Austin's apartment stock — is posting positive rent growth (+1.7% and +3.4% respectively) even as Class A declines. Value-add investors are particularly active here, targeting 1980s-2000s vintage product along South Lamar and Oltorf for renovation and rent repositioning.Net absorption: 19,000 SF.

Cap Rates and Comparable Sales

Average cap rate: 5.5%. Range: 4.8% - 6.8%.

• Wildcreek Apartments, 1511 Faro Dr, South Central Austin: $32,000,000 ($138000/SF), sold 2025-12
• Cielo I + II + Retreat at Wolf Ranch (Austin portfolio): $187,000,000 ($218000/SF), sold 2025-03

Construction Pipeline

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

Notable Market Activity

• Continental Realty Group: Colorado-based investor acquired Wildcreek Apartments (232 units, 1984 vintage, 63% occupied) in South Central Austin — deep value-add play at $138K/unit. JLL brokered.
• South Congress District: SoCo corridor continues to attract mixed-use development and retail investment, supporting apartment demand from hospitality and retail workforce.
• St. Elmo District: Emerging creative/mixed-use district along St. Elmo Rd gaining momentum as an alternative to higher-priced South Lamar and SoCo corridors.
• Value-Add Investors: Class B product accounted for 70%+ of metro transaction activity in 2025. South Austin's 1980s-2000s vintage stock is a primary target for renovation and rent repositioning.

Demographics

Population: 2,607,298. Growth rate: 1.8%. Median household income: $93,658. Job growth: 1.4%.