The normalization of remote work and the temporary lack of entertainment options due to the pandemic have impacted demand for apartments in the urban core, according to a new report from the San Antonio Apartment Association.
The submarket including downtown, Southtown and Brackenridge Park saw a 5.6% rental-rate decrease in 2020, according to ApartmentData.com research cited by the SAAA.
Submarkets outside of the urban core saw the most rent growth in the area, with neighborhoods adjacent to I-10 including Leon Springs, Boerne and Kerrville seeing an increase of 5.7%, according to ApartmentData.com. The New Braunfels and Seguin submarket saw the second-most growth with rents rising 3.7%.
Outside of these specific areas, the average monthly rent across the entire submarket stayed flat, rising 0.4% to $984 from March to December, the Houston-based data company found. While prices didn’t soar as far upward as previous years, the industry remains optimistic.
“The growing gap between home prices and flat rent prices locally means renting will be a better option in many areas,” said Teri Bilby,
executive director of the SAAA, in the report. “With San Antonio’s significant young population, pent-up demand can be expected for apartment living, especially once this cohort enters the job market and/or attains more solid financial footing.”
San Antonio-area economist Will McIntosh, USAA Real Estate head of global research, said that constraints in the single-family home market combined with a growing employment base could bode well for the multifamily industry.
“Shifting homebuyer preferences for additional living space in suburban residences, stimulated by work-from-home and home- school needs, contributed to robust demand,” McIntosh said in the report. “But inventory shortages, explosive construction costs and rising home prices will be challenges for single-family home sales.”
Publication: San Antonio Business Journal