SAN ANTONIO BUCKED SOME NATIONAL TRENDS IN Q3
by Jordan Brooks
Market Analyst | ALN Apartment Data
E
ven after the first quarter of 2022 , but certainly by mid-year , it was clear that a paradigm shift had occurred for multifamily demand . 2022 was destined to represent a cooldown from last year ’ s dizzying heights , but what has materialized nationally has been the lowest apartment demand in years – and by a wide margin . For Greater San Antonio , net absorption was in negative territory through June of this year , and the tide has not turned in the time since .
All numbers will refer to conventional properties of at least 50 units .
New Supply and Net Absorption
New deliveries in the third quarter across Greater San Antonio were elevated relative to recent years . Approximately 2,200 new units equaled the new supply volume from the third quarter of the last three years combined . The increased flow of new units into the market was one of the notable changes for the area to occur in the third quarter . Zooming out to a year-to-date view , the roughly 3,100 new units delivered so far in 2022 were within the typical range established over the last five years – but on the lower end of that range .
While new supply volume was increasing , realized apartment demand remained in negative territory . Just less than 400 net leased units were shed in the period . Although this made Q3 2022 the third consecutive quarter with negative net absorption for Greater San Antonio , the loss of rented units was actually smaller than in the previous two quarters of this year .
The combination of negative net absorption and increased new supply resulted in a 1.3 % decline in the period to bring average occupancy to just under 92 % to end September . Even after average occupancy declines in all three quarters of 2022 , last year ’ s apartment demand was so substantial that market-level average occupancy remains about 150 basis points higher than it was entering the pandemic in 2020 . It has been this excess occupancy that has allowed rent growth to continue well beyond the apartment demand surge that did not survive into 2022 .
Average Effective Rent and Lease Concessions
Last year average effective rent across Greater