San Antonio Performance Strengthens as Construction Eases

Performance in San Antonio’s multifamily market has logged serious momentum recently. Occupancy has climbed 120 basis points thus far in 2019, hitting a 3rd quarter rate of 94.6% – a seven-year high for the Texas market. Annual rent growth has more than doubled in the past year, reaching 3.3% in 3rd quarter 2019. This rent growth upswing came after a lull that lasted for most of 2017 and 2018. The biggest factor in San Antonio’s recent improvement has been a slowdown in new completions. After inventory growth peaked at 3.6% in early 2016, building has steadily tapered off, dropping to less than half that rate (1.4%) in 3rd quarter 2019. Supply is forecasted to pick up marginally over the next year but inventory growth should remain well below the market’s five-year average of 3%.