Could Lower Apartment Occupancy Lead to Lower Rent Prices in San Antonio?
By Stephanie Esquivel
Lower Occupancy Rates Lead to Possible Change in Rent Prices
In a city witnessing rapid growth like San Antonio, it’s not uncommon to see new apartment buildings mushrooming in every corner. According to the San Antonio Apartment Association, this increase in the apartment supply could potentially lead to a decrease in rent prices.
“I think we’ve all seen a lot of new apartments getting built. I feel every single highway or road that I’m on, I see a new apartment complex going up,” according to commercial building specialist Alan Gonzales.
COVID-19 and Its Impact on Property Development
Despite the city’s boom in apartment complexes, the global pandemic has played a significant role in stalling the progress of new projects. Gonzales explained that fewer residents were interested in moving, thereby affecting the demand of the real estate market.
“If there is an over-supply and too many developments are built, these units have to be absorbed. We have to anticipate as much of what’s needed with city planners.”
On the Brink of a Building Boom?
Despite the slight pause in construction due to the pandemic, Gonzales predicts developments will pick up pace by year-end. “Everyone in the industry for construction for housing, certainly for multifamily and apartment complexes, forecasts an acceleration by the end of the year and beginning of next year. We have a pretty thick pipeline of projects due to start”, said Gonzales.
He also emphasized that builders are not only focused on creating more apartments but are also exploring a breadth of housing options. “Not just large apartment complexes but build-to-rent space, duplexes, townhomes- we’re finding unique ways to allow people to find a place where they can live and afford it,” added Gonzales.
Looking Forward
With an anticipated 17,000 new apartment units to hit the market by the end of 2024, the future is looking bright for potential renters. Given the current slow demand and an increase in housing options, there might be a downward pressure on rental prices as the competition for tenants will increase amongst landlords. Thus, the lower apartment occupancy may indeed lead to lower rental prices in San Antonio, making the city a more affordable place to live in.