Units Under Construction
In addition to the flood of new units in properties working toward stabilization , there are more than 14,000 units currently under construction that are not yet leasing . The bulk of these units are expected to enter the market by the end of next year and represent the short-term picture for upcoming supply . These units will make 2024 and 2025 the most active years for new supply in Greater San Antonio in more than a decade .
One aspect that is a bit of a double-edged sword for the market is the location of the upcoming supply . When ranked by units under construction , the same submarkets generally populate the top of the list as those that were atop the list for recent deliveries . This means that the pressure of the new construction pipeline will not be faced by every part of the market . However , that also means that a handful of submarkets will bear the brunt of this historic supply .
In particular , Greater New Braunfels with its more than 2,800 units under construction and the Downtown – Riverwalk area with its roughly 1,300 units under construction represent the tip of the spear . Other parts of the market , such as the Far West and South-Central regions each have more than 1,000 units currently being built and rank in the top five submarkets for both recent deliveries and upcoming deliveries .
Eighteen ALN submarkets across Greater San Antonio finished May with at least one property under construction . This is slightly higher than the fourteen that have seen some level of recent new supply . Even so , only five of those eighteen submarkets have upcoming supply of more than 1,000 units .
Takeaways
Greater San Antonio multifamily continues to slog through a challenging period . Overall market-level average occupancy closed May lower than at any point in the 2008 through 2010 period , and average occupancy for stabilized properties stood only 160- basis points above the low-water mark of that period . Lackluster apartment demand continues to play a role , but the primary challenge is a poorly-times surged in supply .
Looking ahead to the end of the year , average occupancy is all but assured to fall further . For now , average effective rent growth has remained in positive territory by a thread . 2024 is unlikely to finish with that remaining the case .
* Jordan Brooks is a Senior Market Analyst at ALN Apartment Data .
Overall market-level average occupancy closed May lower than at any point in the 2008 through 2010 period , and average occupancy for stabilized properties stood only 160-basis points above the lowwater mark of that period .
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