The San Antonio-area apartment market has consistently seen good news in 2018, and May was no different.
Apartment occupancy rose 20 basis points to 89.8 percent in May, while the average rent per unit increased by $5 to $928 per month, according to the latest ApartmentData.com report. The average price per square foot rose by a cent to $1.09 per square foot, while the average size of an apartment increased by 1 square foot to 850 square feet.
The rental rate in San Antonio has increased by 1 percent since June 2017, with 4,885 units absorbed. Operating supply across the San Antonio area sits at 886 communities, four more than last month, and 186,909 total units. Since June 2017, 33 communities totaling 7,846 units have opened, while 24 communities totaling 6,324 units are under construction, with another 7,875 units proposed.
As the summer moving season begins, some hot markets have developed across San Antonio. Over the past three months, areas like Leon Springs-Boerne-Kerrville, Brooks and Port San Antonio have seen annualized growth of more than 1.3 percent, with Brooks leading the charge at 3.25 percent annualized growth.
With regard to absorption, Brooks represented 1.5 percent of total market absorption over the past three months, while the Leon Springs, Boerne and Kerrville areas accounted for 4.4 percent of total apartment absorption during that time.
The Northwest submarket around Interstate 10 and North Loop 1604 West is the most active area for multifamily development in the city, and due to the continued price increases around there, it seems that renters are finding more amicable deals further north along I-10.
Concessions also continue to decrease as summer rolls in. May saw the prevalence of nearly every type of concession subside, while the number of units with concessions declined by more than 2,000. At the end of the month, 76,770 units were receiving concessions, or 41 percent of San Antonio’s apartments. Class A concessions fell 3 percentage points to an even 50 percent; Class B concessions fell 2 percentage points to 41 percent; and Class C concessions fell 1 percentage points to 40 percent. Class D units were the only ones that saw an increase in concessions, up 5 percentage points to 21 percent, or 4,253 apartments, over 1,000 units more than last month.
Across the other three major Texas metros, occupancy rates and average price per unit rose across the board. As of the end of May, Dallas-Fort Worth had the highest occupancy rate among major Texas markets with 91.6 percent, while Austin remains the most expensive apartment market, averaging $1,207 per unit. In the last 12 months, rental rates have risen the most in Houston, 5.3 percent, while Dallas has seen the most absorption since last May, with 17,313 units.