Plus, real-estate brokers have a case of AI anxiety

If you are looking for a place to rent in Austin, don’t wait much longer. The city’s apartment vacancy rate was down last year for the first time since 2021. And analysts project that rents will stay flat or even increase this year, following at least 10 quarters of decreases. Austin’s population boom during the pandemic fueled a surge in new housing development. Now, as Rebecca Picciotto reports, that excess supply is finally being absorbed. “We’re starting to turn a corner,” said Brennen Degner, CEO at Platte Canyon Capital. “Next, you’ll start to see rents pick up, you’ll start to see concessions burn off.”

Commercial real-estate firms have a fight on their hands: convincing investors that you need humans to sell stores, warehouses and offices. Share prices of big real-estate services firms such CBRE, JLL and Newmark nosedived this month over fears that AI will eat into their businesses. Even though share prices rebounded somewhat, investors still worry that AI will shrink the office-using economy itself. Peter Grant sizes up these threats and talks to real estate execs who say there is no substitute for human relationships in their business.

Once America’s Most Affordable Rental City, Austin Is About to Get More Expensive

Renting in Austin, Texas, is about to get pricey again, a sign that the era of cheap rent across the Sunbelt is reaching an end.
Investors are flocking back to the market, buying apartment buildings and betting that they will be able to raise rents by early next year, if not sooner. The activity marks a significant turning point for Austin. The city has been working through a glut of new apartments since the pandemic-era construction boom.

AI Anxiety Has Found Its Way to Real-Estate Brokers

AI is putting the futures of commercial real-estate brokers at stake. Investors are assessing whether AI could eat away at the broker industry’s lucrative advisory fees and commissions while virtually eliminating niche businesses such as appraisal.
Many investors are already dumping real-estate stocks. The stock prices for CBRE Group, JLL, Cushman & Wakefield and Newmark Group recently nosedived, wiping away tens of billions of dollars of market capitalization for the sector.

Data Points

• 5,120: The monthly rent for a San Francisco two-bedroom, surpassing the price of a New York City two-bedroom for the first time since 2023, according to Zumper. San Francisco’s housing prices have skyrocketed in recent months, driven by AI bulls.
• 24%: The amount of retail space available in Chicago’s Central Loop, more than quadruple the rate of the overall metro area, according to CoStar. That vacancy rate demonstrates a stark divide between the city’s downtown core versus the suburbs where storefronts are less empty.
• 91.2: The consumer confidence index in February, up from 89 last month, according to The Conference Board.