Average Effective Rent and Concessions
It was on the rent growth side of the ledger that stabilized properties most resembled the market overall . Average effective rent rose by 3.5 % to close May at $ 1,043 per unit . This was not far off the 4.1 % mark for the market as a whole . Additionally , while obviously beating last year ’ s result , 3.5 % growth was considerably higher than the 2.6 % mark from the same portion of 2019 .
One reason for the rebound in rent growth has been the continued decrease in lease concessions , both in availability and average value . 34 % of conventional properties that entered 2021 already stabilized ended May offering a lease discount . This rate of availability was down 20 % from the start of the year and also slightly lower than the 35 % mark for the overall Greater San Antonio market . The average discount value also declined , though more slightly . A 4 % reduction from January through May brought the average lease concession to just less than three weeks off an annual lease . This too is only just barely below the market as a whole . No submarket lost ground on the rent front through May , but a few areas stood out in a positive way . The Alamo Heights – Terrell Hills region of the market managed average effective rent growth of 6 %, while the La Cantera – Dominion and Windcrest – Converse areas each added around 5.5 %.
Takeaways
After a tough 2020 , it is fantastic to see strong results across the board for Greater San Antonio as we head into the summer . Even more encouraging , the progress has not been solely in the lease-up subset but spread throughout the market to include stabilized properties as well . Apartment demand , average occupancy change , and average effective rent change for stabilized properties have all surpassed not only the dismal 2020 numbers , but the pre- COVID 2019 marks as well .
While some submarkets did see a net loss in rented units , only two lost more than 50 net units . Furthermore , rent growth was in positive territory for every submarket and four areas gained 5 % or more in the period . The expiration of the eviction moratorium does provide some uncertainty in the near term , but demand has been strong and the area appears to be in a good position as we move through the portion of the calendar that is typically best for multifamily .
www . saaaonline . org | JULY 2021 15