A FINAL LOOK AT 2023 MULTIFAMILY PERFORMANCE
F E B R U A R Y E D I T I O N
By Jordan Brooks , Senior Market Analyst , ALN Apartment Data
2023 was something of a challenging year for the multifamily industry nationally . Demand improved significantly from 2022 but was still low relative to the historic norm and fell well short of offsetting new supply . The new construction pipeline further ramped up its activity and delivered more new units than in any recent year . The resulting downward pressure on average occupancy was enough to finally take the remaining wind out of the rent growth sails . At the market level , Greater San Antonio was a good example of these national trends at work last year , but with some important distinctions as well .
All numbers below will refer to conventional properties of at least 50 units .
JORDAN BROOKS
New Supply
More than 7,000 new units were delivered across Greater San Antonio in 2023 . This was the newest supply of any year in more than a decade and roughly double the 2022 total . Importantly , whereas many Sunbelt markets have been in the midst of a growing construction boom going back a handful of years or so , Greater San Antonio new supply has been more stable despite the 2023 deluge . Evaluating new supply in two-year increments to even out some of the year-to-year variance results in deliveries of between 10,000 and 11,000 new units for each two-year period of the last decade ending with the 2022 through 2023 period .
This was the newest supply of any year in more than a decade and roughly double the 2022 total . Importantly , whereas many Sunbelt markets have been in the midst of a growing construction boom going back a handful of years or so , Greater San Antonio new supply has been more stable despite the 2023 deluge .
Another notable occurrence last year was that a higher proportion of new units entered the market outside the price Class A space than in a typical year . ALN assigns price class according to a property ’ s market-level percentile rank for average effective rent per square foot . The top 12 % of properties in a market are considered Class A properties . Just over 2,800 new units entered the market in 2023 within the Class A subset – the most units in more than five years .
27 FEBRUARY 2024 | WWW . SAAAONLINE . ORG