AThe Greater New Braunfels area led the way with just under 1,000 new units delivered so far this year . Other active submarkets included Thousand Oaks – North of Starcrest and Northwest – Helotes with approximately 800 and 700 new units , respectively . In all , fourteen of twenty-five ALN submarkets for Greater San Antonio had at least one new property delivered .
Net Absorption Below the Market Level
A few different perspectives shed some light on where precisely the demand troubles have been concentrated . For properties that entered the year already stabilized , net absorption totaled just approximately 300 units through July . This was a sharp improvement from the net loss of more than 3,800 leased units in the same portion of the last two years when combined . However , what demand there is continues to be focused within lease-up properties at the expense of existing stock .
On a related note , net absorption improvement has occurred across the price classes relative to last year , but demand continues to be skewed toward the top of the market . Because most new supply enters the market in the top two price tiers , the price class absorption data makes sense within the context of lease-up properties accounting for most demand . Even so , price classes C and D account for more than 60 % of Greater San Antonio units but have only managed 15 % of the market ’ s net absorption total so far this year .
Takeaways
An unfortunately-timed surge in new supply has coincided with a prolonged period of poor demand to create a supply – demand imbalance not seen even during the depths of the Great Recession . The result has been an astounding 1,000-basis point decline in overall average occupancy since the end of 2021 . Unfortunately , there are currently roughly 13,000 units under construction across the market . This means that new supply will continue to be a headwind through next year .
Any relief in the meantime will have to come from an apartment demand rebound . 2022 appears to have been the trough , 2023 provided some measure of progress , and 2024 has so far continued that trend . However , to this point , the relatively modest improvement in demand has been like scooping water out of a sinking boat with a toy bucket .
* Jordan Brooks is a Senior Market Analyst at ALN Apartment Data .
Just more than 900 net absorbed units in the Alamo Heights – Terrell Hills area led the way , followed by nearly 650 net absorbed units in the Stone Oak – Sonterra submarket
Lastly , net absorption in just two submarkets has equaled more so far this year than in all other submarkets with positive net absorption combined . Just more than 900 net absorbed units in the Alamo Heights – Terrell Hills area led the way , followed by nearly 650 net absorbed units in the Stone Oak – Sonterra submarket . Fifteen other submarkets with positive net absorption through July totaled only about 1,400 net units . Eight others suffered a combined loss of more than 1,000 leased units – led by a net loss of more than 500 units in the Marymont – San Antonio Airport region .
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