San Antonio, Texas Multifamily Market Report
Market Overview
San Antonio continues to be one of the fastest-growing metros in the country. The market’s population growth, as indicated by recent Census Bureau data, outpaces many other major markets in the nation, providing fundamental support for overall growth. San Antonio is an economically diverse market with strengths in various industries, including healthcare, hospitality, defense, civil government, finance, international trade, and cybersecurity.
San Antonio is known as “Military City, U.S.A.” due to its significant military presence, with a local economic impact totaling $27 billion annually, supporting numerous jobs. This multifamily market is facing supply-side challenges due to a record-breaking wave of new construction. High vacancy rates and rent growth challenges have been observed, but there are indications of a demand recovery. Long-term growth prospects remain strong.
Highlights
- San Antonio ranked third in terms of residential growth among metro areas with a population of two million or more, according to the Census Bureau.
- San Antonio is experiencing a record-breaking construction pipeline, with 18,161 units currently underway.
- New multifamily properties in San Antonio are striving to attract tenants by emphasizing community, access to amenities, and proximity to mixed-use areas.
- According to CoStar Group, San Antonio has the highest vacancy among all 34 major multifamily markets with at least 150,000 units.
Rents | Vacancy | Construction
Rents in San Antonio have seen a decline of 1.3% metro-wide over the past 12 months. The market has experienced rent fluctuations, with some renters considering homeownership, but new multifamily developments are capitalizing on their unique advantages to attract tenants. The vacancy rate stood at 11.3% at the end of Q2 2023, higher than the national average. As of the summer of 2023, there were more than 18,000 units under construction, with the majority concentrated in the Class A segment of the market. San Antonio is facing supply-side challenges with a large construction pipeline, but developers are diversifying their focus across various submarkets. While financing difficulties exist, certain areas with strong absorption rates continue to attract development attention, contributing to the changing landscape of the San Antonio housing market.
San Antonio is known as a development-friendly metro, contributing to higher vacancies compared to cities with greater population densities and geographic constraints.
Sales
San Antonio By the Numbers, Last 12 Months
- Units Under Construction: 18,161
- Units Delivered: 8,908
- Vacancy Rate % Change (YOY): 3.1%
- Asking Rent Growth: -1.3%
Bexar County has 1,469 apartments (6+ units), and there have been 60 sales YTD in 2023 and 72 sales when annualized. The velocity is down to 3.88% (4.90% annualized). Total sales volume is estimated to be $346 million or $415 million annualized.
2022 had 180 sales at a volume of $1.3 billion, which is 12.25% for the sales to properties percentage. Number of sales is down 60% from last year and volume is down 68.08%. This is even further down from 2021 when the velocity was 15.11%, the number of sales was 222 (down 18.9%), and the sales volume was $1.7 billion (down 23.53%).
