Average Effective Rent
As already mentioned , the Greater San Antonio market saw average effective rent climb by 2 % in August . For the most part , the various price classes mirrored their performance from July in August . The exception was the Class A group . An effective rent gain of 4.9 % in July was followed by a gain of 2.1 % in August . The aforementioned increase in the average concession value for these properties were a factor , but the main driver was decreased aggressiveness on the part of operators with asking rent . Average asking , or market , rent rose by 3.6 % in July but gained only 1.7 % in August .
A handful of submarkets also trailed the rest of the market fairly substantially in terms of rent growth in August . The Balcones Heights – Jefferson area managed only a 0.3 % gain during the period . The Downtown – Riverwalk , Seguin , and Woodlawn – St . Mary ’ s University regions of Greater San Antonio each added right around 0.5 % to average rent . The first two areas mentioned are among the larger submarkets for Greater San Antonio according to unit count , so flagging rent growth in those areas in particular had an impact on the market-level number .
Beyond just seasonality , which also rears its head in the net absorption numbers , there was some change on the lease concessions front . The availability of discounts continued to decrease in August , and rather substantially so , but the average discount value slowed in its decline . More than that , in the Class A space the average discount value increased in August . Lastly , rent growth of the sort that has been achieved so far this year simply is not sustainable , even with surging apartment demand . Effective rent growth for the market through August was 11 %, more than double that from the same portion of 2019 . Unlike many areas of the country , rent growth did not end up in negative territory in 2020 , so this year ’ s gain has not been a recapture of COVID-era losses .
With summer drawing to a close , and 2021 rent growth already in double-digits , it ’ s likely the trajectory of growth will continue to moderately taper as we approach year end .
Takeaways
Rent growth in the Greater San Antonio market , while by no means lukewarm in August , finally did not surpass the previous month ’ s mark for the first time in five months . Multifamily is a highly seasonal industry , and the fact that rent growth is typically strongest in late spring and early summer undoubtedly played a part in the slight cooldown .
www . saaaonline . org | OCTOBER 2021 17