The apartment market survey reports a 6.3% vacancy rate, up from 5.9% in the 2001 first quarter. Hendricks researchers say renters are choosing more affordable apartments and some are using low-interest rates to buy homes. Those trends are pushing vacancies at recently built higher-end complexes.
Rents increased 3.5%, a pullback from the 4.8% jump in the first quarter last year. Apartment owners received average rents of $601 per month in the first quarter, up from $580 per month in Q1 2001. Submarket rent changes ranged from a 3.7% dip in the western sector to 6.6% in New Braufels/Seguin.
First quarter apartment demand strengthened with an absorption of 307 units compared to a negative absorption of 314 a year ago. Work was under way on 818 units in the first quarter, an increase from 598 units in last year's first quarter. Overall, about 3,000 units are under construction in the San Antonio area, which discounts the positive impact of a decrease in permits to 324 in the first quarter from 1,153 last year.
Buyers and sellers were quieter in the first quarter, completing six confirmed transactions down from nine a year ago. All 2002 transactions were complexes built before 1990, which decreased the average price per unit to $30,978 from $43,821.
Hendricks researchers say San Antonio's base of health care, government and services steadied its economy and helped the city avoid the high job losses of other cities. Year-to-year job growth was just 0.1% at the end of the first quarter, but from February to March about 3,800 new jobs were added.
San Antonio's hotel business is picking up, according to Hendricks. Bookings are 11% higher so far in 2002 than 2001 and hotels are adding jobs.
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