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Market analysts say an oversupply of new apartment buildings, now at a 50-year-high, has led to a rapid drop in rental prices.
The average rental costs for one and two-bedroom apartments in San Antonio took a nose dive over the past 12 months, according to a study published this week by online rental marketplace Zumper
The authors of the report argue that the rapid decline is due to the real estate market "normalizing" following the COVID-19 pandemic. However, other market analysts maintain that a slew of new apartment construction is driving rents lower nationwide.
In November, the average rental price for a one-bedroom apartment in the Alamo City hit $1,050, a 9.5% decline from the same month in 2022, according to a the Zumper report. Meanwhile, the average price for a two-bedroom apartment here hit $1,360, a 5.6% drop from a year prior.
San Antonio's rent decline is comparable to that of Austin, where the cost of one-bedroom apartments also declined 9.5% year over year, the analysis shows. Out of the 100 largest U.S. housing markets, the rent in 60 declined year over year, according to the figures.
"This continued softening is partially due to the fact that pandemic-era price hikes are still normalizing in many markets — especially in Zoomtowns across the Sun Belt, where we're seeing the steepest year-over-year declines," the study's authors wrote.
However, other market analysts say the price drop is a matter of oversupply.
The number of units being built nationally is at a 50-year-high, with over 1 million being built in the past three years and 460,000 being completed this year alone, CNBC reported in September
Most of the new apartment construction across the nation has focused on higher-end residential complexes, meaning renters have more options when choosing a property, causing prices to drop, according to CNBC.
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