I
n Central Texas, multifamily developers responded to post-pandemic demand for housing by rapidly building new apartments. However, this surge in construction has led to an oversupply of units in some areas. In the San Antonio suburb of Seguin, a small market was flooded with 456 new apartments last year, accounting for nearly a quarter of the town's total inventory.

    The rapid influx of new units has resulted in a high vacancy rate of 24% and limited tenant mobility. Unlike San Antonio, where renters frequently switch between apartments to find the best deal, Seguin's residents tend to prefer single-family homes over apartments. As a result, many of the new units remain unoccupied.

    In San Antonio itself, the oversupply of multifamily units has led to intense competition among apartment complexes, giving tenants the upper hand in negotiations. Average rents have dropped by 5% as developers struggle to fill half of the 14,500 units delivered last year. Austin is also experiencing a similar trend, with average rent decreases of 12.5% due to an oversupply of 36,000 new units. To attract tenants, landlords are offering concessions, including free months of rent, in over 70% of Class A apartments.