Encouraging Signs in Price Class Data
Takeaways
Reason for optimism can be found across the board in the price class data for Greater San Antonio . At the top of the market , both the Class A and Class B subsets have managed improvement from the same threemonth period a year ago and recent demand has been the best for this time of year since 2021 .
Just over 400 net absorbed units for Class A was the highest total since the three months ending in February of 2015 . However , once adjusting for the number of Class A units in the market , this year ’ s total was second highest among recent years – just behind the 2021 peak . The story was much the same for Class B . Both in net units absorbed and in the size-adjusted metric , this year ’ s total of about 250 units was the highest since 2021 .
In the Class C space , the nearly 350 net absorbed units since the start of December was down slightly from the same period a year ago but was otherwise the highest since February of 2016 . For Class D properties , net absorption in the period was negative to the tune of almost 200 units . However , this portion of the calendar has featured a net loss of leased Class D units every year for more than a decade . This year ’ s loss was the smallest since 2021 .
The imbalance between new supply and apartment demand continues to apply downward pressure on average occupancy , and therefore , on rent growth . However , after a particularly tough year in 2022 , the improvement that began in 2023 appears to be continuing into 2024 .
As already mentioned , that upward trend will need to continue and accelerate in the coming months . It is very unlikely that net absorption will match new units delivered this year , but narrowing the delta to the extent possible would go a long way to improving other performance metrics like occupancy and rent .
A three-month period is too short a time to make many sweeping statements . Despite that , what has occurred in recent months across San Antonio has been a level of demand not seen since the early days of an historic 2021 , and prior to that , not since the middle of last decade . Risks remain , but so far , the year is off to an encouraging start .
* Jordan Brooks is a Senior Market Analyst at ALN Apartment Data .
What has occurred in recent months across San Antonio has been a level of demand not seen since the early days of an historic 2021 , and prior to that , not since the middle of last decade .
24 24 APRIL AUGUST 20242023 | WWW | WWW . SAAAONLINE . SAAAONLINE . ORG. ORG