San Antonio rose by almost 7 % in just the third quarter . This year for the same portion of the calendar the appreciation rate was just under 3 %. This average rent gain represented a very slight reduction from the second quarter , but each quarter of 2022 has now seen rent growth between 2.5 % and 3 %. The market is now a full year removed from the middle two quarters of last year which accounted for essentially half of rent growth since the start of 2021 .
Rent gains were lower than in the third quarter of this year across all the price classes , but Class A appreciation fell the least – one of a few indications of stickier demand at the top of the market . The largest rent growth losses were observed in the Class B and Class C subsets , led by an 80 % decrease for Class B relative to Q3 2021 .
After six straight quarters of decline , concession availability for new leases rose in the third quarter . 15 % of conventional properties closed September offering a discount for new residents , up about 5 % from the start of the quarter . Although a slight move toward concessions has now transpired , the rate of availability remains more than 50 % lower than in the immediate pre-COVID period in early 2020 . It is likely that discount availability will continue to trend upward at least through the next couple of quarters .
The fourth quarter is usually softer for multifamily than the third . Given that , it appears likely that net absorption will finish the year in negative territory for all four quarters and average occupancy will be further pressured in the coming months . Silver linings for Greater San Antonio operators include a remaining average occupancy cushion from last year , and average effective rent growth that will close the year near 10 % even if no growth materializes in the fourth quarter .
Takeaways
For many markets around the country , net absorption that had already been poor moved even further downward and rent growth finally returned to a more-typical level in the third quarter . For San Antonio , the quarter played out a bit differently . Net absorption was negative , but less so than in the first or second quarters . Rent growth did slow from earlier in the year , but only when measured with a decimal point .
www . saaaonline . org | NOVEMBER 2022 13