SAAA April 2022 Residence Magazine | Page 25

Class C
At the risk of sounding like a broken record , annual net absorption of almost 2,300 units for the Class C subset of properties was more than double the total from the previous annual period and the metric was negative for the 12 months ending in February of 2020 . The resulting occupancy bump of just under 3 % brought the average to 95 % to end February and a 16 % annual jump in average effective rent led to the average Class C unit leasing for about $ 1,125 per month . Two years ago , that average was $ 985 .
While both net absorption and average occupancy change have been negative over the last three months , the performance in the period more closely resembled recent history than for the top two price classes . A loss of about 200 net rented units in the period represented a larger loss than last year but compared favorably to a net loss of almost 400 units from December 2019 through February 2020 . As with the other two price classes , rent growth has remained well above the typical level in recent months . It should be noted , though , that monthly rent growth has declined in four of the last five months for this group . double the units lost from December through January in the prior two years combined . Even so , and once again , a 1.5 % average effective rent gain was well above normal .
Takeaways
While it ’ s true that the winter months are relatively softer for the multifamily industry , the last three months for Greater San Antonio have seen a shortfall in apartment demand compared to recent history . Class C has really been the only subset of properties to approximate typical absorption and occupancy performance since the start of December , and Class D struggled the most .
Rent momentum is unlikely to continue at such an unusually high pace unless another increase in apartment demand materializes . The next couple of months will be an important test case to get a clearer understanding of which factors are exerting more influence on the market – price pressure from rent growth plus macroeconomic conditions such as inflation and falling consumer confidence versus positive seasonal effects and strong fundamentals .
Class D
Annual net absorption of about 900 units for Class D properties was more than in the previous 24 months combined and led to an average occupancy increase of 0.8 % to 92 % overall . Average occupancy at the end of February was slightly higher than in either 2020 or 2021 , but this year was the first time Class D average occupancy ended February below Class B . Average effective rent growth was just over 8 % for the 12-month period and brought the average Class D unit to around $ 925 per month .
Zooming in , the Class D segment has struggled over the last three months . A net loss of a little more than 600 rented units drove average occupancy down by 1.6 % in the period . Both the loss in rented units and the average occupancy loss were significantly larger than in the same portion of the last two years . In fact , this year ’ s net loss of rented units was almost www . saaaonline . org | APRIL 2022 25