by John Hill
May 2016 continued a four-month trend of diminished vacancy for rent houses awaiting a tenant. February 2016 rentals spent an average of 39 days on the market and this has steadily declined to 33 days on the market seen in May 2016. Still, this is 3 days above the 12-month average of 30 days that Abilene rentals remain vacant awaiting a lease.
This overview utilizes NTREIS data on leased properties in Abilene, Texas. This data provides 13 months of data spanning May 2015 to May 2016, allowing the user to look across these months at changes in rental prices, days on market and inventory available town wide, both by school district and by zip code. The percentage changes calculated in this table compare the current month’s statistics to an average of the last 12-months and the data from the same month in the 2015.
When we consider days on the market at the zip code level, the story is mixed. In May, rentals in 79602 and 79605 met or beat the 30-day average that it took to identify a tenant and strike a lease. Homes in 79601 closest to the universities took 44 days to lease, the longest time to indentify a tenant across the five zip codes evaluated. With the exception of homes leased in 79603, all ZIP codes saw a slower commitment to lease when compared to their past performance over the past 12 months.
Town-wide, average total rents fell $42/month when compared to April 2016, but total rent is still $31 above the 12-month average or a 3% gain in price across this period. When one considers that inflation rose .61% since May 2015, this increase represents a 2.27% real gain in rent across the 12 months reviewed.
May 2016 rentals were 2.6% larger than those rented in the past 12 months and 4.6% larger than homes rented in May 2015. This gain in square footage in tandem with the gain in rent seen across the last year blunts the good news regarding rising rents. Rather it reinforces the axiom that larger homes rent for more, an observation that anyone could make without the aid of this data.
Evaluating rent on a square foot basis provides a measure of control for the role of square footage on rent. Rent per square foot remained 1¢ above the 12-month average and 2¢ above May 2015. Rents decreased town-wide when compared to April 2016, but this was true across all ZIP codes and school districts with the exception of 79601. 79601 has seen flat rents for the last two months and mirror this ZIP code’s 12-month average. For the third straight month, Wylie ISD rentals held steady at 90¢ per sqft while AISD rentals were 1¢ higher than their past performance over the last 12 months.
Compared to the 12-month average, May 2016 rentals in both the Abilene ISD and Wylie ISD roughly matched the average age of rentals leased over the past 12 months. When analyzed by ZIP codes, 79601 rentals were newer by 10 years than inventory leased over the last 12 months. When we couple this statistic with flat rents and growing time 79601 rentals spent without a tenant, it begs further questions about rentals in 79601. Of the 60 homes leased in 79601 in 2016 to date, 5 were built in the last 10 years and leased in 26 days for a price/sqft of 82¢. In contrast, 55 rentals in 79601 that are older than 10 years and spent 39 days on the market and leased for 65¢/sqft. A more comprehensive analysis of old rental versus new rental can be seen in a separate analysis.
25% of the homes leased in May permitted pets, matching the prior month and 6 points below the 12-month average of 31% of rentals available to pet owners. Pet deposits averaged $236 which was $27 below the 12-month average for pet deposits. In contrast, security deposits in May 2016 were up $13 from the previous month and $73 above the 12-month average of $862. On a square foot basis, May’s security deposits measured 64¢ per square foot.
According to NTREIS, 87 single-family homes were leased in May 2016. These units leased at, on average, 76¢/square foot and were sized at 1,456 square feet. Consequently, these leases are estimated to deliver a May 2016 value of $96,356 to the Abilene economy. Considering the coming 12 months and the leases executed during May 2016, these leases potentially account for an $1,156,381 annual contribution to Abilene’s economy.