With a growing number of tech companies set to relocate from California to Texas, including Tesla, Oracle, and HPE, RENTCafé anticipates that the state will see a swell in new apartment demand as employees and job hopefuls move to follow. In a new report, RENTCafé researcher Alexandra Ciuntu uses Yardi Matrix data to tabulate the new apartment supply and pipeline that Texas’ major metros have ready for an influx of new apartment residents.
A total of 126,900 new apartments are under construction across the state of Texas, according to Yardi Matrix. Of the state’s major metros, the Dallas metro has the most apartments expected to be delivered at 49,000, with 11,400 to be delivered in the city itself. Financial services company Charles Schwab announced its move to Dallas in 2019, and a few months ago real estate brokerage CBRE announced that it would move its global headquarters to Dallas from Los Angeles.
The Austin metro has 31,000 new apartments in its construction pipeline, of which 22,600 are located in the city, the strongest supply pipeline in any of the major Texas metros. Oracle is set to move to the Austin area, and Tesla is expected to open a new branch set to create 5,000 new jobs.
The Houston metro has 28,600 upcoming apartments, of which 17,400 are located in the city. San Antonio has 10,900 upcoming apartments, with 9,300 in the city proper.
Between 2010 and 2020, the state has added nearly 2,000 new apartment buildings, or a total of 503,000 new apartments, across its metros. The Dallas metro has added 177,400 new apartments over the last decade—52,000 in the city alone—while Houston has added 131,300 apartments in the past 10 years, or 83,000 in the city. Suburban apartment supply is also growing fast—eight out of the top 20 suburbs with the most apartment growth over the last five years are located in Texas, with Frisco and McKinney taking the top two spots.
A two-bedroom, two-bathroom apartment in a high-end Texas city building rents at about $1,600 per month on average, while a three-bedroom, two-bathroom apartment rents for $1,800 on average. The Dallas area has 389,600 apartments classified as high end, followed by 303,800 in the Houston area and 147,400 in the Austin area.
The average rent across all apartment sizes and types was $2,355 in Los Angeles and $2,998 in San Francisco in December, according to RENTCafé. At the same time, the average rent across all apartment sizes and types was $1,249 in Dallas and $1,102 in Houston.
“Texas holds the indisputable advantage of land use,” says Doug Ressler, manager of business intelligence at Yardi Matrix. “What’s great about it is that it enjoys an adequate availability to support population growth and migration, from dense cores to available exurban or suburban areas.”
