| Summer is finally over and Apartment | | | | least 100 more on the horizon. This type of news |
| communities that maintained 90-100% occupancy | | | | and the historically slow fall and winter months are |
| levels throughout the summer have now been | | | | forcing apartment communities to drop their |
| bombarded with new fall and winter time notices | | | | prices and drop them fast. There are at least |
| to vacate. Apartment communities pre-lease | | | | twenty communities that I can think of right now |
| apartments based on their notices to vacate | | | | that have dropped their prices $50-$75 in the last |
| which are usually given 60-90 days out from the | | | | month from August pricing to compete with the |
| resident's move date or lease end date. | | | | new properties that have opened or are opening |
| Most long term tenants are being pushed out of | | | | up in their vicinity. |
| their apartments with rental increases up to $200. | | | | For example the Wyndhaven apartments on |
| Many of my clients recently call me discouraged | | | | Wells Branch. For years wyndhaven was only one |
| stating that they have been a perfect resident | | | | of two A property options in the Wells Branch |
| for 5 years or more and dont understand why | | | | area. Their smallest 1 bdrm apartment 630sf was |
| their aparmtent community is so anxious to "stick | | | | going for $769 a month. Then comes the Verde |
| it to them" when it comes time to renew their | | | | Oak Park apartments that opened a month or |
| leases. | | | | two ago right next door. The day Verde Oak |
| The first question I ask them is how much they | | | | Park opened their doors Wyndhaven went to |
| are paying currentlly ie; a client we'll call Leslie that | | | | $679 on the same floor plan. It still didnt help |
| I am helping move currently. Leslie told me that | | | | them though Verde Oak Park has a similar square |
| she is paying $625 for a 740sf apartment in a | | | | footage for $710 Brand New Never Been Lived |
| community she has lived at for 5 years, the | | | | In! Then they were offering two months free |
| apartment community is only 7 years old, and | | | | upfront. Well if you average out the two months |
| they want to raise her rent to $725. The first | | | | free over the lease term which was 13 months |
| thing I told her was that the community wanted | | | | (aka a prorate) $1420 is the total concession or |
| to raise her rent $100 due to the fact that since | | | | (special) divided by the minimum lease term which |
| she leased there 5 yrs ago the market had | | | | was 13 months equaling $109.23. The $109.23 is |
| completely changed. Unfortunately the only people | | | | your average monthly concession. You then |
| that view long term occupants at an apartment | | | | subtract the $109.23 from the monthly rental |
| community as an asset are the occupants | | | | rate. $710 minus $109.23 equals $600.77 a month |
| themselves. | | | | for 13 months. Plus these apartments contain |
| The truth of the matter is that Leslie and many | | | | granite countertops, washer and Dryer etc and |
| others around Austin whom of which have been | | | | are BRAND NEW and have NEVER BEEN LIVED in. |
| exemplary tenants are being viewed as a loss to | | | | So, yes rental rates are dropping dramatically with |
| their apartment communities. With a shortage of | | | | the rise of new communities you just can't be |
| available apartments in Austin the market has | | | | fooled by upfront numbers anymore. My advice is |
| changed. For example 5 years ago in South Austin | | | | that you always contact a Real Estate |
| you could get a nice apartmnet at an A class | | | | professional regarding the procurement of leasing |
| property for between 6-$700. Now you cant | | | | transactions for the consumer Texas Real Estate |
| even get near an A class property in South | | | | Agents/Realtors are always 100% FREE. And |
| Austin for less than $900 and that would be for a | | | | recommended. Yes rates are higher but if you |
| 1 bedroom apartment. Availability pushes pricing. If | | | | look past the first picture of the rate being $710 |
| a guy has 50 apartments available they lower | | | | when you're pricerange is $650 and you end up at |
| prices and offer up a massive upfront concession | | | | Wyndhaven which is over ten years old and a |
| ie; 1 month free 2 months free etc. But when a | | | | much lesser quality class A property at $679 then |
| management company looks down and sees that | | | | the only one to blame is yourself. With the newer |
| they are 96% full which has been the case most | | | | communities trying to fill up their properties they |
| of this summer and historically most summers | | | | are offering great upfront concessions that will |
| then their rates rise to the market rates (the | | | | bring the rates back down. |
| highest rates they can charge for a particular | | | | You should always contact an apartment locator |
| unit). Long term residents are being viewed as a | | | | before looking at apartments on your own. If that |
| loss and therefore pushed out. | | | | apartment locator dosent find you the best deal |
| The good news is that in the last two or three | | | | available and you are not happy enough to move |
| months there have been at least twenty new | | | | in then they dont get paid that is your insurance. |
| apartment communities open. There are also at | | | | |