Even with positive first quarter demand and an average occupancy increase of almost 5 %, the Downtown – Riverwalk area closed the quarter with the market ’ s lowest average occupancy at around 75 %. On the other side of the coin , the Seguin area finished the quarter with an average occupancy of 95 %.
Average Effective Rent and Lease Concessions
The result of all this for rent growth was a 1.4 % increase in average effective rent for Greater San Antonio – approximately triple the rent growth of Q1 2020 . Two areas stood out in particular from the perspective of effective rent growth in the quarter . In the Castle Hills – Whispering Oaks – Oak Hills submarket , rent growth in the quarter was 3.2 %. Even higher , the Northeast – Universal City region managed 3.8 % growth .
The availability of lease discounts decreased noticeably in the opening quarter of the year , by around 7 %. At the end of March , 40 % of conventional properties were offering a new lease discount . That figure was 38 % of properties at the end of March 2020 and 33 % at the end of March 2019 , so discount availability seems to be tracking back into more typical territory . After essentially no change during the period , the average discount value closed the quarter at about three weeks off an annual lease – a level approximately equal to recent years .
Takeaways
The first quarter was a strong one for multifamily nationally , and for the Greater San Antonio market as well . The area took advantage of a break in new supply matched with strong apartment demand to add to both average occupancy and average effective rent . One tailwind for rent growth was a decreased reliance on lease concessions -- a welcome sight . Another welcome development was the robust occupancy growth in the Downtown – Riverwalk submarket to open the year .
Looking ahead , with the continued COVID-19 vaccine rollout bringing resumed economic activity , the area appears well-positioned for a positive second quarter as well .