As many real estate markets around the country are flirting with reversal, the San Antonio area is holding up surprisingly well. So far, there is no reason to believe that the macroeconomic turmoil will manifest locally, especially given the staggering performance of the industry over the past two years.
Other economic variables currently influence the major market indicators. Therefore, seeing a significant housing depreciation should reflect a severe pullback across the board. Luckily, the local economy is more robust than ever, which sends an optimistic outlook as we enter fall. With this seasonal and typical market correction out of the way, the metro area can expect new highs come spring 2023.
But what justifies optimism in the face of a nationwide slowdown?
The current state of the San Antonio housing market
According to Redfin, if we look across all types of homes, the median property sells for $295,000. To put this number in perspective, it is only a few thousand dollars below the record high of late spring and an increase of 12.2% year over year. Arguably, the price appreciation is better than ever, especially if we look five years back.
Similarly, the sale-to-list price is 100.3%. Interestingly, it has hardly fluctuated for the last couple of years, indicating a competitive market. Nevertheless, 47.7% of homes sell above their listing price, a decrease of 9.8% compared to July last year.
Currently, 43.4% of residential properties dropped in price, which bodes well compared to the national average, but marks a local recession compared to last year, with 17.7%.
According to many seasoned investors, buying a property during the fall is often seen as a lucrative opportunity, especially considering the historical charts. Luckily, there are a large number of move-in-ready homes in San Antonio that combine an affordable price with a satisfying list of features.
Factors to look for when analyzing the market
In truth, economic and urban developments can significantly influence the real estate market. Renting, for example, up 21% year over year, works in favor of homeowners and future investors.
Surprisingly, people are being priced out and moving away from Austin and into east San Antonio. More affordable rent, it seems, is somewhat preferable to a shorter commute.
Based on net migration, the metro area has the third largest population growth in Texas, with 23,900 people. According to Stacker, most come from Houston, Austin, and Dallas.
With such a surge in demand, builders began work on 21,000 homes in 2021, a staggering increase over previous years. To put this in perspective, that’s 7% more than in 2006, before the Great recession.
Many of these homes are already entering the market, so that we may see a slight cool down before winter.
Thriving job market
With an average salary of $49.520 and an unemployment rate of 8.1%, slightly below the national average, San Antonio has a healthy job market compared to other metro areas of similar size. New residents are looking at growing job opportunities in bioscience, manufacturing, and renewable energy. Toyota, Valero Energy Corp, and the Southwest Research Institute are hiring local talent and offering competitive wages.
Similarly, Joint Base San Antonio provides employment opportunities for thousands of residents. For younger demographics with less skill and experience, the hospitality sector is well-represented, as the area is a popular destination with a continual influx of visitors from around the country.
Young professionals look at San Antonio and see a thriving market that feeds on a city full of culture and opportunity.
After decades of investment in the tourism sector, there is certainly an increased interest in downtown areas and public spaces. City leaders recognize the power of urban trends, which at the moment tilt towards pedestrian areas, biking infrastructure, and ample vegetation.
Yanaguana Garden, Hemisfair Civic Park, and San Pedro Creek unite this vision of improved access for anyone who settles downtown. But the city is still lagging behind most other major metro areas.
Though the San Antonio metro scores 34 for walkability out of 100, individual neighborhoods fare much better. Downtown, for example, scores 82, Five Points a close 80, and Arsenal, Tobin Hill, and King William score 79, 78, and 78, respectively.
If similar numbers show up across the map, the city will become much more desirable over the coming years.