by Jordan Brooks
Market Analyst | ALN Apartment Data , Inc .
MARKET UPDATE Mid-Year Review : Greater San Antonio
Although it seems hard to believe , the halfway point of 2021 is already in the rearview mirror . At the national level , the multifamily demand rebound that began in the latter half of 2020 has continued and the new year has also brought a reduction in lease concessions and robust effective rent growth . With this in mind , let ’ s take a closer look at how the year has played out through June for Greater San Antonio .
As always , only conventional properties of at least 50 units will be included .
New Supply and Net Absorption
Unlike the country as a whole , new supply through the first six months of the year was lower than in recent years for Greater San Antonio . Just less than 2,000 new units were delivered in the period compared to around 3,100 and 2,400 new units in 2020 and 2019 respectively . The slowdown in new supply came as apartment demand was stronger than in those two previous years by a wide margin . Approximately 5,800 net units were absorbed through June . Not only did this easily outpace last year ’ s COVID-affected result , but this year ’ s absorption was also significantly higher than the roughly 3,700 net units in 2019 . The effect of this supply / demand dynamic was a 2.4 % increase in average occupancy to just over 92 % to close June .
Notably , although the submarket with the largest average occupancy increase was Kerrville , the two central San Antonio ALN submarkets of Downtown – Riverwalk and East of Downtown – Inner Loop took the next two spots . Each added right around 13 % to average occupancy thanks to robust demand and no new supply in the period . In terms of net absorption , the Stone Oak – Sonterra and Alamo Heights – Terrell Hills submarkets led the way with around 1,000 and 900 net absorbed units respectively .
Average Effective Rent and Lease Concessions
While apartment demand this year has been well beyond not just 2020 but 2019 as well , this year ’ s average effective rent growth has surpassed 2019 ’ s numbers by an even wider margin . Average effective rent increased by 6.4 % across the Greater San Antonio area through June . For context , 2020 saw a 0.4 % gain and in 2019 the increase was 3.4 %.