San Antonio Multifamily Investment Forecast
Regionally Low Construction and Rents Will Help Tighten Vacancy, Captivating Yield-Driven Investors
Development dwindles despite improved demand tailwinds. The household count in San Antonio is projected to increase by 1.8 percent this year, beating the national average and placing it in the 20 fastest U.S. market expansions. This surge in residents, and ultimately demand for rental housing, warrants an aggressive multifamily construction pace which has yet to occur. San Antonio's apartment inventory will grow by 1.5 percent this year, compared with supply jumps of more than 2.0 percent in all three other major Texas markets, including a 6.1 percent rise in neighboring Austin. Slower construction in San Antonio allows for the steepest vacancy contraction among major Texas markets this year, with demand bolstered by robust in-migration trends. Out-of-state residents prioritizing quality of life as well as Texas residents seeking lower-cost housing will be drawn to the metro. In 2022 and in the coming years, more people residing in Austin will migrate south to San Antonio where the average effective rent is expected to be about $425 per month lower at year-end, compared with $260 per month just five years earlier.