San Antonio Housing Market: Prices, Trends & Forecasts 2022

The San Antonio housing market shares many of the same characteristics as the national real estate industry. In particular, local housing prices continue to test new highs, inventory remains tight, and demand is still intact. For all intents and purposes, the San Antonio real estate market is firing on all cylinders; there just aren’t enough listings to keep up with demand. As a result, prices have finally reached what appears to be a tipping point.

The Fed’s latest decision to increase interest rates 75 basis points, the most since 1994, should slow every real estate market in the country, and San Antonio won’t be an exception. Higher rates are expected to lower mortgage applications and temper demand. With fewer buyers expected to be in the market, the San Antonio housing market may see a decrease in appreciation rates. Home prices may cool off for the first time in years, which begs the question: Is San Antonio, Texas a good place to invest in real estate?

The San Antonio housing market is a great place to invest in real estate, as long as investors know where to look. Today, with interest rates rising and prices at record levels, investors may want to prioritize long-term rental properties. While up year-to-date, rates are still relatively low and can help offset higher acquisition costs over years of rent collections.

San Antonio Real Estate Market 2022 Overview

• Median Home Value: $298,626

• Median List Price: $377,660

• 1-Year Appreciation Rate: +24.8%

• Median Home Value (1-Year Forecast): +11.3%

• Weeks Of Supply: 8.3 (+2.1 year over year)

• New Listings: 913 (-1.5%% year over year)

• Active Listings: 5,051 (+0.9% year over year)

• Homes Sold: 705 (-15.4% year over year)

• Median Days On Market: 15.2 (-2.3 year over year)

• Median Rent: $1,274 (+12.5% year over year)

• Price-To-Rent Ratio: 19.53

• Unemployment Rate: 3.3% (latest estimate by the Bureau Of Labor Statistics)

• Population: 1,451,853 (latest estimate by the U.S. Census Bureau)

• Median Household Income: $53,420 (latest estimate by the U.S. Census Bureau)

• Total Active Foreclosures: 477

San Antonio Housing Market Trends 2022

All of today’s San Antonio housing market trends are the direct result of the pandemic, or the economy’s attempt to counteract its impact. For years, in fact, demand has increased in the wake of low interest rates and government stimuli. Similar trends will most likely continue for the foreseeable future, but the Fed’s latest decision to increase interest rates 75 basis points should represent a changing of the tides. As the Fed combats inflation, let’s take a look at where San Antonio housing market trends have come from and where they are most likely to go over the next 12 months:

• Supply Trends: The San Antonio housing market currently has about 8.3 weeks of inventory. At this point last year, San Antonio had about 6.2 weeks of inventory. The increase is encouraging for everyone in the local market, but supply trends have a long way to go until they are at a balanced level. The Fed’s decision to increase interest rates will likely slow demand and increase available inventory, but only modestly. In the meantime, low inventory levels will continue to increase prices in the San Antonio real estate market.

• Home Price Trends: In one year’s time, local home values have increased 24.8%. The increase is the result of relatively low interest rates and years of government stimuli. The demand created by these indicators enabled sellers to increase their asking prices accordingly. Moving forward, the San Antonio housing market trends we already know are expected to continue. Prices will increase on the heels of supply and demand constraints, perhaps as much as 11.3% over the next 12 months. The slower rate of appreciation will be caused by several more rate hikes which will making owning a home that much more difficult.

• Interest Rate Trends: Interest rates have been climbing over the course of 2022 in an attempt to combat inflation. Over the first half of the year, the average commitment rate on a 30-year fixed-rate mortgage has gone from 3.45% to 5.23%. The rate hike represents one of the steepest inclines in decades and should continue to march higher. As a result, the San Antonio real estate market should finally see demand cool off a little. The increase in rates will prevent many buyers from participating in the market, and could eventually bring an end to today’s historic appreciation rates.

• Investor Trends: Mortgage rates are impacting the way San Antonio real estate investors conduct business. At the very least, higher rates will persuade many investors to act sooner rather than later. Investors who can take advantage of relatively low rates may be able to help offset some of today’s high prices. In fact, those who look to rent their properties may be able to increase profit margins by taking action before the next rate hike.

San Antonio Foreclosure Statistics

The national foreclosure rate is on the rise. While down 8% month over month, national foreclosures are up 160% year over year. As recently as April, there were a total of 30,674 U.S. properties with foreclosure filings, according to ATTOM Data Solutions’ latest U.S. Foreclosure Market Report.

With delinquencies on the rise, however, the entire Texas real estate market ranked towards the middle of the foreclosure rate pack. The Lone Star State saw 2,297 foreclosures at the beginning of the second quarter; at that rate, one in every 5,045 households was in some form of foreclosure. The San Antonio housing market, on the other hand, currently boasts about 477 foreclosures. Of the city’s distressed homes, 475 are to be sold at auction and only three have made the transition to bank ownership.

With the vast majority of foreclosures in the San Antonio housing market either up for auction or heading to the auction block, local investors will want to start their search for distressed inventory at a local courthouse or check their listings for nearby auctions. If for nothing else, attending auctions currently looks like the best way to purchase a foreclosed property below market value in the San Antonio real estate market.

With that in mind, foreclosures are likely to increase over the rest of the year. The looming threat of a recession has already forced may employers to slow hiring. In the event of a recession, job cuts can be expected. While the San Antonio housing market boasts a relatively low unemployment rate, any increase could lead to more foreclosure filings.

San Antonio Median Home Prices

The median home value in the San Antonio housing market has tested new highs each month in 2022. Today, the average price of a home in San Antonio is about $298,626. Again, prices have ridden the wake of new indicators created by the pandemic. In fact, local home values have increased at the same rate in the last two years compared to the six years leading up to it.

Since the pandemic was officially declared a global emergency, the median home value in the San Antonio housing market has increased 40.2%. In the six years prior to the pandemic, local home values increased about 41.0%. Home prices have gone up at a faster rate in the last two years because the Fed created demand by lowering interest rates and flooding the economy with government stimuli. Pent-up demand eventually turned into competition over too few homes and appreciation did the rest.

Moving forward, it’s safe to assume home prices in the San Antonio real estate market will continue to increase. Many forecasts are calling for an appreciation rate around 11.3% over the next 12 months, which looks likely. After all, demand will continue to drive prices higher, but increases in interest rates will eventually lower the level of competition. As borrowing costs increase, demand will taper off and slow the rate of appreciation.

San Antonio Housing Market Forecast 2022 – 2023

The San Antonio housing market has followed the same trends as its national counterpart; that is to say prices have increased dramatically in the face of insufficient inventory levels and historic competition. That said, the Fed’s latest rate hike may change the direction of the San Antonio housing market, as it relates to other similar metros. If for nothing else, San Antonio’s unemployment rate and promising job sector may give it a more promising outlook over the next 12 months. That said, here is a look at a San Antonio housing market forecast which is most likely going to come true:

• Home Values Will Rise: Home values in the San Antonio real estate market have risen for ten consecutive years, dating back to the bottom of the last recession. With just 8.3 weeks of available inventory and an above-average job sector, demand will continue to outweigh supply. The disparity between the two indicators will increase home values approximately 11.3%. The rate of appreciation will be slower than last year because of several more rate hikes made by the Fed, which will surely decrease demand.

• Rents Will Rise: Rents are up 12.5% in as little as 12 months. Everyone who couldn’t buy, whether they were priced out or couldn’t get past the competition, was forced to become a renter. The added attention in the rental market drove up rental rates, and will continue to do so at a faster pace over the next year.

• Interest Rates Will Rise: The Fed has already increased the benchmark interest rate to fight inflation, and more increases are on the way. The exact number of increases isn’t yet known, but it is safe to assume higher rates will increase the cost of homeownership in the San Antonio housing market sooner rather than later. The mere threat of rising costs will also increase demand, further boosting home values.

Should You Invest In The San Antonio Real Estate Market?

For the better part of ten years, investors in the SanAntonio real estate market have relied on foreclosures and distressed homes to improve profit margins. However, the last two years have seen a dramatic decrease in distressed homeowners. As the government swore to stimulate the economy, one of its many initiatives was to prevent landlords from foreclosing on tenants. Over the course of the pandemic, distressed homeowners were protected, but the moratoriums are running out.

While still relatively low, local foreclosures appear to be on the rise in the San Antonio housing market. Today, about 474 homes in the area are expected to be sold at auction; that means investors will have an opportunity to buy a home below market value if they intend to flip real estate. Those who don’t land a deal at the auction houses, however, will most likely need to take advantage of today’s interest rates. While up year-to-date, interest rates still represent a great opportunity to offset today’s higher home prices.

Those who qualify for a food rate on a traditional loan may want to consider becoming a landlord. Rental investments offer investors the ability to offset today’s high prices with equally impressive rental rates. Given the right property with a proper cash flow, there’s no reason to avoid homes that cost considerably more than they did one year ago. Rent checks could easily make the acquisition well worth the price in a relatively short period.

At the very least, rentals look to have a long runway ahead of them. Demand should remain for the foreseeable future thanks to the following indicators:

• Fast Economic Growth

• Growing Rental Market

• Affordable Real Estate

• High Redevelopment Potential

• Great Job Market

• High Quality Of Life

San Antonio Real Estate Market: Where To Invest

It is hard not to be encouraged by the latest San Antonio housing market forecasts and trends. As the second largest city in Texas, San Antonio has a lot to offer both residents and investors. That said, it’s not enough to simply invest blindly. The San Antonio real estate investing community will want to invest in the right places. Instead of investing just anywhere, real estate investors should consider the following areas for their next deal:

• Downtown

• Oakland Estates

• North Central Thousand Oaks

Downtown

The Downtown San Antonio real estate market remains a great place for rental property investors to look for a deal. At the very least, Downtown is a popular destination for those looking for a community with plenty of amenities within walking distance. For a better idea of what to expect when shopping in the Downtown area, please consult the following:

• Median Sales Price: $660,000 (+13.1% year over year)

• Number Of Homes Sold This Month: 21 (+10.5% year over year)

• Median Days On Market: 47 (-61 year over year)

• Sale-To-List Price: 98.2% (-0.31 pt year over year)

• Homes Sold Above List Price: 9.5% (-6.3 pt year over year)

Oakland Estates

Oakland Estates ranks as one of the San Antonio real estate markets most desirable neighborhoods. With a population somewhere in the neighborhood of 8,109 people, the community is relatively small. However, this neighborhood has something for just about everyone, from young professionals to retirees. For a better idea of what to expect when shopping in the Oakland Estates area, please consult the following:

• Median Sales Price: $850,000 (+102.4% year over year)

• Sale $/Sq. Ft.: $233 (+61.8% year over year)

• Number Of Homes Sold This Month: 1

• Median Days On Market: 46

• Homes Sold Under List Price: 2.0%

North Central Thousand Oaks

North Central Thousand Oaks ranks highly among San Antonio’s most desirable neighborhoods. With a dense suburban feel, North Central Thousand Oaks doesn’t shy away from offering a great nightlife. The area has a lot of bars, restaurants and coffee shops to cater to everyone from young families to middle-aged professionals. For a better idea of what to expect when shopping in the North Central Thousand Oaks area, please consult the following:

• Median Sales Price: $390,000 (+25.8% year over year)

• Number Of Homes Sold This Month: 28 (+3.7% year over year)

• Median Days On Market: 14 (+1 year over year)

• Sale-To-List Price: 104.5% (+1.9 pt year over year)

• Homes Sold Above List Price: 71.4% (+4.8 pt year over year)

Summary

Much like the rest of the country, the San Antonio housing market has enjoyed a great run for the better part of a decade. However, while most cities have seen their home values become exorbitantly expensive, real estate in San Antonio remains relatively affordable. As a result, few places have seen investors realize higher increases in their gross profit margins in recent history. The relative affordability has retained investors’ ability to flip real estate and participate in long-term strategies simultaneously. However, it is worth noting that while flipping remains a viable option, current conditions do seem to favor passive income investors.

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Sources

https://www.zillow.com/san-antonio-tx/home-values/
https://www.zillow.com/research/data/
https://www.freddiemac.com/pmms/pmms30
https://www.freddiemac.com/pmms
https://www.redfin.com/news/data-center/
https://www.bls.gov/regions/southwest/tx_sanantonio_msa.htm
https://www.apartmentlist.com/research/category/data-rent-estimates
https://www.sofi.com/learn/content/foreclosure-rates-for-50-states/
https://www.census.gov/quickfacts/fact/table/sanantoniocitytexas,US/PST045221
https://www.attomdata.com/news/market-trends/foreclosures/attom-april-2022-u-s-foreclosure-market-report/
Downtown-San-Antonio/housing-market
Oakland-Estates/housing-market
North-Central-Thousand-Oaks/housing-market
San Antonio Foreclosures