Negative Performance Metrics Moderated in January
by Jordan Brooks , Senior Market Analyst , ALN Apartment Data
After monthly average effective rent growth for new leases averaged about 1 % through the first nine months of 2022 across Greater San Antonio , the fourth quarter saw a significant downward shift in trajectory .
The year finished with three consecutive months in negative territory as nonexistent apartment demand continued to pressure market occupancy . In the first month of the new year , average occupancy and market-level net absorption continued in their morass , but rent growth inched back toward positive territory . All numbers will refer to conventional multifamily properties of at least 50 units .
APARTMENT DEMAND July of 2022 was the last period in which monthly net absorption for the Greater San Antonio area was in positive territory . In that month , the net change in leased units was a gain of less than 30 units . For context , in July of 2021 net absorption totaled just under 2,000 units . In July of 2020 the same metric stood at approximately 1,200 net units . In the six months since July of last year , the market has shed around 3,200 net lease units . Simultaneous to that loss , new supply totaling about 2,700 delivered units has helped to push average occupancy down by three percentage points to close January at its lowest point since the middle of 2020 . January did represent something of an improvement on the apartment demand front at the market level . The nearly 600 net units that moved from leased to unleased in the period was a loss about half that of the roughly 1,200 net leased units lost in December . Only Class A properties managed to avoid negative territory in January , but only by a paltry 30 or so units . The specific pain point was within Class C . A net loss of more than 450 net leased units was the worst January performance of any price class in the last five years , and by a solid margin , with the exception of a loss of about 570 net leased units in the Class D segment last January .
13 FEBRUARY 2023 | WWW . SAAAONLINE . ORG