Rent Report

San Antonio's strong economy points to rising rent prices in 2019

The River House Apartment Homes San Antonio

San Antonio rents saw a big jump in January.

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Once again, Texas has been named the No. 1 state for growth, and San Antonio is following the trend. San Antonio, like the rest of Texas, is in a good place, and new stats point to economic optimism in 2019.

This data provided by real estate brokerage firm Marcus and Millichap to Abodo highlights Alamo City's growth (in all directions):

6,200 multifamily units were completed in 2018
Employers are moving back downtown
Employment continues to strengthen
Mean household income has risen to $58,563
The median home price reached $255,207 in Q1 2018
Annual household growth posted a 1.7 percent gain, above the U.S. average increase of 1.1 percent

Healthy economy, higher rents
With these healthy economic trends, you would expect apartment rents to follow, and that is exactly what happened in 2018. The average one-bedroom rent in San Antonio finished the year at $907, a 0.67 percent increase over 2017. Two-bedroom units posted a 1.1 percent gain, priced on average at $1,160. Despite the gains, San Antonio is still in a great spot in terms of pricing relief for renters.

However, San Antonio saw a big jump in January, as the median price for a one-bedroom unit is up 4.31 percent, and the median two-bedroom unit gained 3.8 percent and will now cost an average of $1,312.

While San Antonio didn't make Abodo's list of top 10 rent increases for 2018, that may very well change in 2019 if the January trend continues.

Key factors
Texas has always been a boom-or-bust oil state, but as of early January, it looks like oil may have steadied itself. From a low of around $42 per barrel, oil has bounced back to around $52 per barrel. This is great news for frackers, but keep in mind that the industry has made amazing strides in its ability to still make money when oil prices are low. Therefore, the Texas economy remains strong, and we foresee that trend continuing in 2019.

Rising interest rates can negatively impact the stock market and the economy as a whole. As the cost of money increases, it becomes harder to make deals, and that can affect apartment growth. Since the recent stock market decline, however, the Fed has seemed to back off from multiple rate increases. With steady interest rates, the economy could keep growing, and that will keep San Antonio rents from a significant drop in 2019.

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bang for your buck

San Antonio ZIP code is 4th most affordable place for renters in U.S.

Photo by Florian Schmid on Unsplash

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Trying to afford buying a home in San Antonio is difficult enough with current mortgage rates, and doubly so if you're already paying high rent on an apartment or a house. But there are six San Antonio ZIP codes where renters can get the most bang for their buck, according to a new study by financial services company CashNetUSA.

To find the most affordable ZIP codes for renters in the U.S., analysts compared median household incomes by ZIP code to the average annual rent costs in those areas using the Zillow Observed Rent Index. ZIP codes where the average annual rental constituted the lowest percentage of median household income were considered the "most affordable."

San Antonio's 78248 ZIP code specifically stood out as the No. 4 most affordable in the country, and the No. 1 most affordable in Texas. This area encompasses the north San Antonio neighborhoods of Inwood, Forests at Inwood, Oakwood, The Park at Deerfield, Canyon Creek Bluffs, Canyon Creek Village, Blanco Village, Deerfield, Cadillac Drive, and Churchill Estates.

According to the study's findings, the average monthly cost of a rental in 78248 comes out to $1,259.17, and the median annual income of a household in the area is $122,986. Analysts then calculated that the annual rent of a home in this ZIP code only takes up 12.29 percent of a household's median income, which is the fourth-lowest in the nation.

CashNetUSA found the No. 1 most affordable ZIP code for renters nationwide is 66224 in Leawood, Kansas, where annual rent only takes a 10.57 percent cut out of a household's median annual income.

Elsewhere in Texas, two Houston-area ZIP codes – 77401 and 77094 – ranked No. 9 and No. 12 nationally, while Allen's 75013 ZIP code fell two spots behind to claim the No. 14 spot.

The most affordable San Antonio-area ZIP codes for renters
CashNetUSA further unveiled the five most affordable ZIP codes across major U.S. cities, including in San Antonio, Austin, and Houston.

Following 78248 (which took the No. 1 spot citywide) is 78261 (No. 2), which spans east of Highway 281, across Smithson Valley Road. Rent costs in this ZIP code averaged out to $1,698 per month, the report found.

Landing in the No. 3 spot is 78258, which includes Rogers Ranch, The Vineyard, Stone Oak, Summit, Hidden Canyon, and Big Springs neighborhoods. The report said average rent in the area comes out to $1,507 per month, which takes up 17.54 percent of a household's median annual income.

The remaining top two most affordable ZIP codes for San Antonio renters are located in 78259 (Encino Park, Encino Ranch, Cavalo Creek Estates, Northwood Hills, Summit at Bulverde Creek, Roseheart, Redland Woods) and 78260 in Timberwood Park, which is about 25 miles north of downtown San Antonio.

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