APARTMENT DEMAND
FELL AGAIN IN JANUARY
by Jordan Brooks
Market Analyst | ALN Apartment Data
With than 600,000 net absorbed units nationally in 2021 and double-digit rent growth and a complete retreat in lease concessions , apartment demand cooled off in January . The first quarter is typically a softer one for the multifamily industry , but January demand fell 75 % compared to January of 2021 . Beyond the percentage change , this year ’ s national net absorption total was considerably lower than in any recent January . Greater San Antonio also saw a decline in demand , though not to so far out of the range established in recent years .
Greater San Antonio Net Absorption
More than 650 net rented units were shed in January across Greater San Antonio . Although this represented the worst January performance of the last five years for apartment demand , it was the third in that period to be in negative territory . Furthermore , of the two years in which January net absorption was positive , the highest value was just over 300 net units gained in 2019 . As recently as 2020 , the net change in the number of rented units for January was negative by nearly 600 units . Although the start to January 2022 included an unfortunate loss of rented units , Greater San Antonio avoided the national outlook of a steeper slide in absorption .
Price Class Demand Net absorption was negative across all four price classes , though a net loss of less than 10 rented units in the Class B subset was just barely so . The slight decline follows a gain of nearly 150 net units in 2021 , but in January of 2020 net absorption for Class B properties was negative by more than 200 units . As with the market-level numbers , for the most part at the price class level the opening month of 2022 was more of a return to a typical range of demand from a historic 2021 than a major regression like at the national level .
The picture in Class C was similar . About 150 net rented units were lost in January , but for this subset of properties that loss was the smallest of the last three years . For Class A properties , a net gain of almost 200 rented units last January was followed by a net loss of more than 50 rented units this January . Even so , as recently as 2020 Class A properties were in negative territory to open the year – before COVID-19 really became a factor .
Class D was the one segment that underperformed recent history to a notable degree . A net loss of approximately 450 rented units in the period was not