TRACKING GREATER SAN ANTONIO PRICE CLASS PERFORMANCE
by Jordan Brooks
Market Analyst | ALN Apartment Data
What a difference a year makes . In December of 2021 , the San Antonio multifamily market was enjoying incredible apartment demand , a nearly 5 % increase in average occupancy from the start of the year and rent growth for new leases that had topped 15 %.
This year , however , the area has suffered negative net absorption and has nearly given back all of last year ’ s occupancy gain . Rent growth has remained elevated beyond the typical range , but finally fell back to Earth in August before turning into negative territory in October and November . The change in dynamics have played out differently across the price classes , with some interesting developments occurring in just the last few months .
All numbers will refer to conventional properties of at least 50 units . year . As a result , Class A average occupancy remains considerably higher than in the years preceding 2021 .
As already mentioned , new supply has been slightly lower this year than in the recent past . Around 1,500 new units delivered fell short of the previous five-year average of approximately 1,900 new units through November . Even so , as a quirk of timing , the last three months have seen more deliveries than has been typical for the area .
While new supply winnowed slightly , apartment demand fell 70 % from the same period last year for Class A properties . Net absorption through November totaled less than 900 units – the lowest in more than five years . The downshift in demand has been stark , but the Class A subset was the only price class to avoid negative net absorption in the period .
In a certain sense , the main point of continuity with 2021 has been rent growth . A gain of just less than 9 % in average effective rent for new leases more than doubled that from any recent year with the exception of 2021 . However , from another perspective , even rent growth has not been able to escape the gravity of a challenging year . The almost 9 % increase was half as large as last year ’ s 18 % gain in the first eleven months of the year .
Class B
Class A
With broad-based occupancy growth in 2021 and a small dip in new supply in 2022 , Class A occupancy has been relatively resilient so far this year . Class A average occupancy across Greater San Antonio finished November at 89 %, down 2 % from the start of the year . This loss followed a 7 % gain in the same period last
The almost 4 % average occupancy decline in the Class B space was equaled only by the Class C subset . Mitigating the downward move somewhat was last year ’ s 8 % gain through November to lead all price tiers . Thanks to the 2021 performance , average occupancy closed this November at approximately 91 % - still higher than in the 2017 through 2020 period .
12 JANUARY 2023 | www . saaaonline . org