Location: Austin-Round Rock-San Marcos, TX | Metro: Austin-Round Rock-San Marcos, TX MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,960 |
| 1 Bedroom | $2,070 |
| 2 Bedrooms | $2,460 |
| 3 Bedrooms | $3,100 |
| 4 Bedrooms | $3,640 |
| 5 Bedrooms | $4,222 |
| 6 Bedrooms | $4,729 |
| 7 Bedrooms | $5,107 |
| 8 Bedrooms | $5,362 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,460 | $216,596 | 1.14% | B |
| 3BR | $3,100 | $265,825 | 1.17% | B |
| 4BR | $3,640 | $311,868 | 1.17% | B |
U.S. Census Bureau data (2024)
The real estate landscape in ZIP 78725 (Austin, TX) presents a nuanced picture for both landlords and small-portfolio investors. With a median home value of $276,691, the area remains relatively affordable compared to other parts of Austin. However, the fact that only 0.3% of listings have been reduced signals strong seller's market conditions. This low percentage of price reductions indicates that homes are selling at or near their asking prices, suggesting robust pricing power for the next 12-24 months.
The median days on market (DOM) being listed as N/A could imply several things. First, it might indicate that homes are selling very quickly, often before the listing can be properly recorded in all systems. Second, it could suggest that there is a high turnover rate, with homes coming onto the market and selling rapidly. Both scenarios point towards a highly competitive housing market, where demand outstrips supply, further reinforcing the strong pricing power of sellers.
On the rental side, the Forward Monthly Rent (FMR) for ZIP 78725 is set at $2,380 for fiscal year 2024, while the market rent, as measured by the Zillow Observed Rental Index (ZORI), stands at $1,951. This discrepancy between FMR and ZORI suggests an upward pressure on rents, indicating that landlords can potentially increase their rental income in line with the FMR without losing tenants to the broader market. The gap between the two figures also points to a trend where government-supported housing programs like Section 8 may offer better returns relative to market rates, making them attractive options for long-term investors.
For long-hold investors, the appreciation thesis in ZIP 78725 is promising. The combination of a competitive housing market with quick sales and strong seller pricing power, along with the potential for higher rental income, supports a scenario where property values could continue to rise. This is particularly true given the broader context of Austin's growing population and economy, which underpin demand for both ownership and rental properties.
In conclusion, the current data points to a market where sellers hold significant pricing power, and landlords can benefit from rising rents. Long-term investors in ZIP 78725 should expect continued property value appreciation, driven by sustained demand and favorable economic conditions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.