Abilene/Taylor County Rental Data: 2009 to 2018

Overview

In the past, Barnett & Hill reported rental data on a monthly basis. Monthly reports yielded little variation in the data summarized; for this reason, our reports will now go to an annual summary of rental data.

Steady rental prices in Abilene are a function of our steady economy. Taylor County's economy is largely institutional - we depend on:

hospitals (with an infusion of Medicaid / Medicare dollars)
three private universities (ACU, HSU, McMurry), one public graduate university (TTUHSC), one 2-year, public junior college (Cisco) and one technical school TSTC which bring guaranteed student loans and other grants.
Dyess AFB that brings over $1 million per day to the Abilene economy.

We are behind other communities on manufacturing (even with the successes of the Development Corporation of Abilene), too close to DFW to capture logistics center like isolated Amarillo, and about 50 miles too far east of the oil-driven economies of Midland/Odessa. Our last boom, if you will, happened when we see a bump due to tax-credit-sponsored wind farm development. Now that the turbines are on the ground, those construction jobs have given way to routine maintenance. The flat nature of Abilene's economic activity is proxied by rental activity in Abilene.

Summary data for Taylor County / Abilene rentals

Average days vacant

Days vacant are an important metric when evaluating the value of rental property. It's not sufficient to know the rent for a single-family home; you also need the number of days vacant to calculated anticipated income for the property. Looking at all Taylor County rentals since January 2009, a rent house will typically sit empty 33 days.

Graphs - average days vacant

Average days on the market is lead by homes in 79601 with a peak of 49 days vacant in 2017. 79602 leases quickest and shares minimum days on the market in 2015 with 79603,

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Across time, Abilene ISD rentals stay on the market longer than Wylie ISD rentals. Until 2018, Merkel rentals traded places with Wylie ISD for days vacant. Jim Ned ISD is the most volatile, but since 2016 registered the fewest days vacant.

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Homes between 0-30 years of in age remain vacant the least amount of time. Homes between 21-60 years in age remain on the market the longest - this could be measuring homes that were built 50 years ago of average quality that are approaching the end of their useful life and marketability.

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Martinez Elementary serves an area that is volatile when analysing days vacant - it goes from a high of 75 days in 2010 to a low of 23 days vacant in 2012. Austin, Bowie, Jackson, and Johnson Elementaries are the most stable in terms of days vacant.

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When it comes to greatest days vacant, there's a Goldilocks lesson to the outcome. Renters don't want big homes nor do they want small homes - they want one that's just right (and "right" seems to be 1000-1500 sf)

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Units leased

A qualification: these number don't represent ALL rentals in Abilene; only those leased by real estate agents. In an attempt to create context, I'll refer to a prior report Barnett & Hill developed to analyze the impact of low interest rates on growth of Abilene rentals. The report revealed that roughly 1/3 of all Abilene homes aren't homesteaded and likely rentals. In 2016, that was 12,149 non-homesteaded homes out of 36,414 single-family homes. In that same year, 953 homes or 8% of those 12,149 non-homesteaded homes were leased by Abilene real estate brokers. That said, you could multiply the plotted points on the graph below by 12.5 to get a sense of the overall market (other things held constant, specifically what a real estate broker brings to leasing).

Graphs - units leased

79605 consistently leads on the number of units leased each year. 79601 has the least number of units leased, but has almost double the number leased by agents between 2009 versus 2018.

No surprise, Abilene ISD has leases more than 3.4 times the number of units as do Wylie ISD. in 2009, Abilene had 4.3 times the number of rentals and while both districts have seen increases in rentals, Wylie's relative growth in rentals has slightly diminished that gap. Jim Ned and Merkel bring up the rear - Jim Ned ISD will be one to watch for rentals going forward.

Looking at units leased sorted by elementary school provides more granularity than ZIP code. Taylor Elementary - which is really a proxy for rentals near ACU - tops the list with 84 units leased by real estate agents in 2018. Bowie, Austin, Ward and Bonham trade with Taylor for the top number of rental units. Buffalo Gap consistently has the least number of rentals. Of the Abilene ISD schools, Dyess Elementary has the fewest agent-leased rentals.

When we look at the number of units leased by size class, we see a clear break between small and large. There are more homes under 1750 sf leased than homes over 1750 sf. Homes 2250 sf and up have the smallest representation in the data. At some point, real estate goes from being a "house" to a "home" and this is more likely the larger it gets.

Nominal rent

The lead summary statistic for any rental is total rent or rent on a per square foot basis. Rent/sqft may be our best indicator of the steady nature of Abilene's steady economic activity.

As we parse Taylor County by ZIP code, school district, and elementary school, it is important to remember this approach masks the negative role of age on rent/sf. 79603 has an inventory of homes than is 20 years older than 79602 and this explains, in part, why they rent for less. Similarly, knowing that WISD homes are, on average, 33 years newer than homes in AISD tells us why AISD rents are cheaper.

Graphs - nominal total rent

Graphs - nominal rent per sqft

Real rent per sqft

The rent statistics reported in the previous section are nominal figures or unadjusted for inflation. Inflation has grown by 1.7% each year since 2009. Landlords hope rents grow by 1.7% or more each year to cover inflation and expenses that may be growing at the same pace - or more.

When inflation is factored and prices are adjusted to real terms, rent per square foot looks flat in many of the scenarios graphed. This means landlords are staying abreast of inflation in terms of rent. Inflationary gains in labor, materials, and utilities to maintain these properties are not captured in these numbers and these numbers are important because they determine profit margin for the landlord.

Graphs - real total rent

Graphs - real rent per sqft

After adjusting for inflation, we can see that homes in 79606 have gained 2¢ per square foot over the last 10 years. For an average-sized 79606 rental measuring 1,662 sf, this translates to an extra $33.24 per month. Leased prices in 79602 have increased by 8¢ and this is driven by the new housing stock in this ZIP code.

After adjusting for inflation, we can see that homes in Wylie ISD have gained 2¢ per square foot over the last 10 years. An average Wylie ISD rental measures 1527 sf - this translates to an additional $30.54 per month. Abilene ISD rentals have gained 8¢ over the last 10 years meaning an average-sized Abilene ISD rental has gained $108.08 per month. At this point, the reader can do their own math regarding smaller, older, cheaper properties in the Abilene ISD with slightly better revenue that rent faster versus larger, newer, more expensive properties in Wylie ISD that rent slower.