The Texan rental market often sets the pace for the whole country, but 2020 was different, according to new Abodo housing market data. Nationally, average rents have risen this year, while rents in Texas have shown a significant downward trend.
The national median rent for a bedroom rose from $ 1,086 in January to $ 1,111, up 2.3 percent. Two bedroom units started 2020 at $ 1,346 and have climbed to $ 1,359, a slight increase of 0.97 percent.
In contrast, the average Texas rent for a bedroom in January was $ 1,054. It fell to $ 1,005 in October, a significant drop of 4.7 percent. Two-bedroom units, which started 2020 at an average of $ 1,306, fell 2.3 percent to $ 1,276 in October.
The declines in Texas are at least partially due to oil prices, Abodo notes. West Texas Intermediate crude oil prices have fallen from a high of nearly $ 60 a barrel to $ 40 a barrel. This is, of course, a big jump from oil lows in 2020, but it’s still well below profitability for most oil companies, Abodo says.
Abodo recently explained the depth of the West Texas oil bankruptcy in terms of room rates: “During the recent oil boom, motel prices – even for budget brands like Motel 6 – were typically quoted at $ 350 a night or more. Rooms are now available for around $ 50. ”
Apartment rentals followed in Midland, with one bedroom prices falling 17.2 percent since January and two bedroom prices falling sharply by 21.1 percent.
The cost of oil and other home leasing challenges in the wake of the pandemic have impacted rental rates in Texas, and Abodo expects statewide rents to remain at current levels or to decline slightly over the course of 2021.
The Austin market is falling right on the downtrend in Texas. Local one-bedroom units started the year at an average price of $ 1,298 and fell to $ 1,268 in October. Two bedroom units in the capital started the year at $ 1,589 and fell to $ 1,563 in October.
Abodo attributes the “slight weakness” in Austin rents to the general economic slowdown and a lack of renewed interest in downtown life.
Will the price decline continue? Some real estate professionals see a hotter rental market in Austin in early 2021 and say it is now time to get a long-term lease before the market can revive.