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