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Apartment rental rates soared last year, but a more modest increase expected in 2022

A sprawling apartment complex sits in a wooded site in San Antonio.JPG
San Antonio Apartment Association
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A sprawling apartment complex sits in a wooded site in San Antonio

The San Antonio Apartment Association last week released its State of the Industry report on the city's booming apartment rental market, which shows renters may see lower rental hikes in the coming year.

While overall average apartment rent soared last year by more than 18%, more modest growth of 6% is expected in 2022, according to statistics from apartmentdata.com that were presented virtually to members of the industry.

The average apartment rent in San Antonio was $1,140 in December 2021, compared to $988 in the same month of 2020 — $152 higher.

What has been driving up rental rates is high demand and low availability. The city's apartment occupancy rate started the year around 93%.

Tony Sousa, a board member at the San Antonio Apartment Association, said future property development can be hard to predict from year-to-year.

Around 8,000 new apartment units could be constructed in complexes across the city in 2022 according to apartmentdata.com, with 7,000 of those likely absorbed already. Apartments downtown and near downtown are among the most popular to rent, but Sousa said that hot streak is also hard to forecast.

"Is urban going to continue to be as popular? Hard to know in the next five to year 10 years, but it is definitely popular now and the Pearl and Silver Ventures have done a tremendous job in growing the popularity of the downtown area or midtown area," Sousa said.

He said local industry members do discuss local rental rates on a regular basis.

"There's definitely discussions that happen between all groups, from management and on-site personnel to owners and developers about what is reasonable," Sousa said.

San Antonio's monthly rental rate this month is $1,140, the lowest rental rate among the four major Texas metros. The rate quoted for each city is based on pricing for 857 to 888 square feet.

Austin had the highest rent this month at $1,540, followed by Dallas-Fort Worth at $1,385, and Houston at $1,184. About 95% of apartments were full in the Metroplex, and around 92% were occupied in Austin and Houston.

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Brian Kirkpatrick can be reached at brian@tpr.org and on Twitter at @TPRBrian