Here is how I would suggest anyone think about the rental market in Austin. Home prices are off their peak by quite a bit, but we haven’t even entered a recession since 2009. The Austin market could get hit hard by a recession because it is a tech driven market these days and a lot of the employment here is as a secondary location to another location. In recessions, secondary locations get hit first and hard.
However, long-term Austin will be a winning real estate market. That tech presence will drive significant growth.
Markets that don’t have good rental cash flow must rely on home appreciation for the long term gains. And right now most rentals are not covering costs+the value of embedded equity. That means as prices drop, the negative or lower cash flow gets worse, and owners must tough out a time period of poor cash flow. Eventually, prices will turn and money can be made on the appreciation. One thing that will help on prices in the near term are the rate cuts. So there is some upside potential too.
TLDR: There is more downside home price risk right now due to potential recession than upside benefit from a rate cut. So rental decisions should be made in the context of holding for at least 5 if not 10 years. If you are just thinking about doing it for 1-2 years, your expected value is likely negative due to the recession risk.