the change in rent growth trajectory occurred gradually , then suddenly .
Recent Rent Growth Despite the fact that net absorption was negative on a year-to-date basis for the entirety of 2022 for Greater San Antonio , average effective rent growth for new leases did not begin to slow until August . This was due in large measure to the residual excess occupancy that carried over into 2022 from 2021 , but by August of last year average occupancy had declined 160 basis points from its 2021 peak . To borrow a phrase , the change in rent growth trajectory occurred gradually , then suddenly . In September of 2022 , monthly average effective rent growth jumped back to 0.9 % before a 0.8 % decline in October began the current run of consecutive negative monthly rent growth . As with apartment demand , January did at least provide one data point in a better direction . An emphasis should be made here that one month of data certainly does not make a trend . It could well be the case that February rent growth dips again . Nevertheless , a 10-basis point slide in January marked an improvement from the previous three-month average of a 60-basis point decline . Seasonal effects usually do not begin until around March , so the moderation of the negative trend provides a modicum of evidence that what had appeared to be something of a freefall in rent growth in recent months has found some stability as spring approaches . One interesting aspect of the January rent data was that despite the challenges on the absorption and occupancy fronts , operators pulled back a little bit on lease concessions . A 7 % decline during the month
meant that less than 20 % of conventional properties were offering a discount for new residents to end January . Maybe more surprising , no price class saw an increase of concession availability during the period . Class C , the price class that led the downward move in net absorption , had the largest decrease in discount availability at 10 %.
Takeaways Net absorption , average occupancy , and average effective rent growth were all negative in January for Greater San Antonio . Each of those three metrics have been negative on a month-over-month basis for between four and six months . However , January also represented an improvement in all three metrics relative to the previous month . It has been a rocky winter for the multifamily industry , but that was not unexpected . As the spring months return , so too should some positive gains for absorption and rent growth . The question will be , are the gains sustainable after the seasonal help fades ?
14 FEBRUARY 2023 | WWW . SAAAONLINE . ORG