San Antonio Apartments Register a Great Quarterly Performance
The National Association of Real Estate Editors — the folks who write about all types of real estate for industry publications and general media sources — held their annual meeting a few weeks ago, this year going to San Antonio. They picked a great city to illustrate the momentum that registers in the country’s apartment market, as San Antonio’s 2nd quarter performance results exhibited everything a property owner or operator wants to see.
Demand in the April-June time frame proved very healthy at the same time that no new supply was delivered. In turn, occupancy registered one of the biggest quarterly bumps seen since MPF Research started tracking the market about 20 years ago. And rents climbed notably.
Let’s start with the demand stat. After six months of pretty lackluster absorption (to some extent a normal seasonal pattern), demand strengthened to 2,020 units during 2nd quarter. That quarterly gain accounted for most of the 3,470 units absorbed between mid-2010 and mid-2011. In comparison, completions were at zero for the quarter and just 1,445 units for the year-ending June.
Occupancy rose 1.4 percentage points during the past quarter, reaching 93.4 percent. While that overall occupancy number still moderately trails the national average, it’s the strongest result for San Antonio in about four years. Furthermore, top-tier communities in the metro now are almost completely full, as occupancy tops 95 percent in developments built during the 2000s as well as the 1990s.
Completing the picture, effective rents for new leases in San Antonio surged 2 percent during 2nd quarter, fueling much of the metro’s 3 percent annual growth in pricing.
In the big national picture, San Antonio’s apartment market is known for its stability, since it so rarely registers the extreme gains or the extreme losses in revenues that often are seen elsewhere. That middle-of-the-pack positioning probably will hold over the next couple of years, but middle-tier revenue growth still looks really good when national results should be so favorable.
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U.S. Apartment Market Revenues Soar 2.5 Percent in the Second Quarter.