SAAA August 2022 Residence Magazine | Page 22

NEW YEAR , NEW REALITY FOR SAN ANTONIO MULTIFAMILY

by Jordan Brooks
Market Analyst | ALN Apartment Data

What a difference a year makes .

At this time last year , the Greater San Antonio market was enjoying apartment demand not seen in a decade as well as historic rent growth , declining vacancy , and the complete retreat of lease concessions . This year , rent growth has remained high and lease concession availability has remained low , but vacancies have been on the rise and apartment demand has crumbled .
All numbers will refer to conventional properties of at least 50 units .
New Supply and Net Absorption
Only about 1,300 new units were delivered in the first half of 2022 . This new supply volume was not only considerably lower than last year ’ s roughly 2,000 new units delivered at mid-year but was the lowest total of the last five years by a considerable margin . In both 2018 and 2020 , more than
3,000 new units were introduced across Greater San Antonio in the first two quarters . Only five submarkets out of 25 saw any new supply in the period and none saw more than the one property of a little more than 300 units in the Stone Oak – Sonterra area .
New supply was relatively low to open the year , but apartment demand has been even lower . The Greater San Antonio market shed approximately 1,500 net leased units through the first six months of the year after net absorption totaling almost 6,000 units in the same portion of last year . Even in the first half of 2020 , the early days of the COVID-19 pandemic , net absorption was in positive territory . This year ’ s result is truly in a category of its own as the only negative value in more than 10 years .
Both Class C and Class D properties finished the period in negative territory for net absorbed units . A net loss of around 1,100 leased units in the Class D subset was the larger loss . Class A narrowly missed being in the same ignominious category with a net gain of less than 100 rented units in the period . Class B , with just over 250 net absorbed units led the way .
The net effect of lower new supply and even lower demand was a 1.5 % average occupancy decline to a little less than 93 %. June was the first month
22 AUGUST 2022 | www . saaaonline . org