New Supply Tempers Rent Growth in San Antonio
- Oct 20, 2017
In recent years, San Antonio has been riding favorable demographic trends, healthy job creation and a high demand for apartments. The metro’s population continues to grow at a pace nearly three times the national rate. The prime renter cohort, aged between 20 and 34 years old, accounts for much of this increase. A heavy new supply of apartments has put a damper on rent growth, up 1.1 percent year-over-year through August, trailing the 2.4 percent national average.
Employment gains were led by the education and health services sector, with 10,100 new jobs. The sector’s progress is likely to continue due to a $390 million Women & Children’s Inpatient Tower announced for northwest San Antonio. Also on the northwestern side, Hulu is investing $13 million in a new, 45,000-square-foot viewer operations center that will employ 500 people.
The metro’s economy continues to appeal to both investors and developers. More than $780 million in multifamily assets changed hands by July 2017, placing the metro on track to surpass the $1 billion mark for the third consecutive year. Apartment construction is still strong, with 3,200 units already completed and an estimated 7,800 apartments expected to come online by the end of the year. Upcoming supply is robust, with more than 8,000 units under construction and more than 10,000 units in different planning stages. Yardi Matrix forecasts rent growth of 1.5 percent for 2017.