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