was small and absorbed units still easily outpaced recent Q3 numbers . Due to this demand picture , both the availability and average value of lease concessions for the market managed their largest decreases of the year . All of this played a role in quarterly rent growth that approached 7 % - exceeding even the gain from the second quarter of this year . but an increase of that magnitude in so short a time can only exacerbate affordability issues . This is especially the case in the workforce housing segment – Class C and Class D properties have gained nearly 8 % in average effective rent through the first nine months of 2021 .
Receding lease concessions continued to play a major role in rent growth as well . By far , the most dramatic downturn in discount availability this year occurred in the third quarter . A 44 % decline brought the share of conventional properties offering a lease concession at the end of September to 18 %. This was the lowest level of availability for Greater San Antonio in more than a decade , and by a wide margin . The areas where discount availability remained relatively elevated were unsurprisingly the Downtown – Riverwalk and Medical Center submarkets . Even there , though , the share of properties offering a lease concession was below one-third . The average discount value also fell precipitously by more than 20 % in the period to only two weeks off an annual lease .
As already noted , Greater San Antonio is fundamentally well-situated as a growth market in a growth state that leads a growth region . However , rent growth of this magnitude and at this pace is not only unsustainable , but ultimately may prove counterproductive in the longer term with respect to affordability , multifamily demand , and increased pressure for government action .
Takeaways
The third quarter was another strong one for Greater San Antonio , to say the least . New deliveries ramped up considerably and apartment demand was more than sufficient and drove overall average occupancy up by nearly 2 %. Net Absorption did not quite match the second quarter , but the shortfall
www . saaaonline . org | NOVEMBER 2021 17