Q4 2022 Multifamily Real Estate Report: San Antonio, TX
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San Antonio’s multifamily market saw generally positive performance throughout 2022, despite moderation in Q4 2022. New deliveries are expected to exceed tenant demand in H1 2023 due to large numbers of new units being added to the city’s construction pipeline.
The population for the city was 2.4 million in 2022 at a growth rate of 1.9%, and the unemployment rate in San Antonio was at 3.2% at the close of 2022.
General Area Overview & Demographics
San Antonio is the seventh-largest city in the United States. Demographically, San Antonio is an ethnically diverse city with a majority Hispanic population at 61%. African Americans make up 8.3% of the population, while Caucasians are at 25%. The remaining 5.7% is made up of Asian and other ethnicities.
San Antonio, TX Median Household Income & Population
The median household income for families in San Antonio is $47,022. This figure is slightly lower than the national average of $51,939. However, the city has seen an increase in median household incomes over the past decade and this trend is expected to continue into the future.
The median age of residents in San Antonio is 33.7 years old. Millennials make up 36% of the city’s population. Additionally, 32% of San Antonians are between 18 and 34 years old and 17% are between 35 and 49 years old. The remaining 15% of the population is over the age of 50.
Prominent higher education institutions in the city include the University of Texas at San Antonio, which is one of the largest public universities in Texas. Additionally, numerous other private colleges and universities offer a variety of academic programs within the city.
Many attractions are located in the city, from the famous River Walk and SeaWorld to the historic Alamo. Additionally, the city boasts two professional sports teams—the NBA’s Spurs and the NFL’s Cowboys—and is also home to a myriad of other attractions.
San Antonio enjoys a mild climate, with warm summers and cooler winters. The average annual temperature is 68 degrees Fahrenheit (20 degrees Celsius). Additionally, the city receives an average of 34 inches of rain per year and has approximately 239 sunny days every year.
Summary of San Antonio Multifamily Real Estate Performance in Q4 2022
The vacancy rate for San Antonio multifamily real estate continued to increase in Q4 2022, sitting at about 5.1% by the end of 2022. Class A property vacancies reached about 4.8%.
The combined vacancy rate for Class B and C properties was about 5.4%.
What are multifamily rents like in San Antonio?
Average asking rents for San Antonio multifamily real estate averaged about $1,135 per month in Q4 2022, with Class A rents averaging about $1,327 per month.
Over the last two years, average asking rents for San Antonio multifamily have increased by about $20 per quarter.
Purchase & Leasing Activity
The median sales price for San Antonio multifamily was approximately $111,600 per unit in 2022. Sales velocity was down 28% year-over-year. Transaction activity also decreased by about 23% quarter-over-quarter.
Notable Multifamily Real Estate Deals in San Antonio in Q4 2022
There were no notable multifamily deals reported in San Antonio for Q4 2022.
New Multifamily Real Estate Development Activity in San Antonio in Q4 2022
More than 2,500 new multifamily units were delivered to San Antonio in Q4 2022, bringing the total for the year to 5,461 units.
New units under construction reached 18,248 at the close of 2022. The Pearl District submarket accounted for approximately 1,350 of these units.
Market Forecast for San Antonio’s Multifamily Real Estate Market
Deliveries are projected to increase in 2023 to approximately 7,600 units. Vacancies will likely increase due to rising new deliveries.
Average asking rents in San Antonio will likely remain steady throughout 2023 as economic pressures and the Fed’s fight against inflation continue to moderate the economy.
Takeaways for Multifamily Real Estate Investors
Due to its strong transaction activity, San Antonio’s multifamily market has drawn numerous investors in recent years.
Sales velocity will likely continue to slow down in H1 2023 due to the imbalance of supply and demand between sellers and tenants. Yet, it’s expected to pick back up as the year progresses.
Do your research, stay diligent, and happy investing.
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