explosion of apartment demand sent rents soaring . The broad-based nature of the positive results was an encouraging indication of the strong fundamentals for the market .
Three submarkets stood out from the rest with annual average effective rent gains of right around 20 % each : Hollywood Park – Camino Real , La Cantera – Dominion – The Rim , and Northwest – Helotes – Grey Forest . On the other side of the coin , only four submarkets failed to reach a 10 % annual gain . Two laggards , a relative term to be sure when evaluating 2021 , were the Southwest – Lackland and Woodlawn – Saint Mary ’ s University areas which added 5 % and 6 % respectively to average effective rent .
An important component of rent growth was a precipitous decline in lease concession availability . An annual decrease of a little more than 60 % brought the percent of conventional properties offering a concession package for new leases down to 17 % to close the year . For some perspective , prior to 2021 the lowest value to end any year of the last five was about 34 % in 2018 . Even in the Class A space , the segment with the bulk of incoming new supply , concessions managed an annual decline of more than 60 % in availability and finished 2021 with only around 21 % of properties offering a discount package .
2021 had the benefit of pent-up demand from 2020 that 2022 will not have , but there is little reason to think this year won ’ t be another strong one for the area . Based on units in the pipeline , new construction activity is likely to increase this year compared to last – though continued construction difficulties will play a role .
One area that bears watching is rent growth , particularly in the Class C segment . The 2021 annual gain was nearly 15 % for these properties , and residents there have less ability than at the top of the market to absorb increases of that nature . In various markets around the county , rent growth is fueling renewed calls for counterproductive measures like rent control . As a result , rent growth figures of such a magnitude could be a double-edged sword .
No submarket saw an increase in discount availability for the year , but three areas closed the year with availability elevated relative to the rest of the market . In the Downtown – Riverwalk portion of Greater San Antonio , one-third of properties were offering a lease concession package at the end of December . In the La Cantera – Dominion – The Rim and Marymont – San Antonio Airport regions , availability was close to 30 %.
Takeaways
2021 was a historic year for the multifamily industry , and Greater San Antonio was certainly not left out of the action . Combined with a decline in new supply , an
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