San Antonio Real Estate Market Trends and Forecasting for 20217 Jan Jennifer Chonillo
The real estate market in San Antonio, TX is booming. On average, 66 people moved to Alamo City daily in 2020 and with its low cost of living and abundance of job opportunities, this trend is only expected to continue.
With all these new people moving in, they need places to live and that has resulted in an increase in the median home prices since 2019. If these trends continue, homeownership in San Antonio is likely to get a little more expensive, so now might be your best chance at buying your next new home.
San Antonio Housing Market Report
Since November 2019, the median listing price for residential real estate has risen by nearly 5 percent according to Realtor.com. However, even with housing prices rising, fewer homes are on the market. There were 10,504 active listings at the end of November 2019 compared to only 6,162 active listings in November 2020.
Some interesting statistics about the San Antonio real estate market that you need to see:
* Median home listing prices have risen by $13,499.50 or 4.72% since 2019
* Active listings for homes has decreased by 41.34% since 2019
* The average time on the market is now 51 days down by 19.05% since 2019
* The price per square foot has risen by 11.26% to $150.34 since 2019
San Antonio Real Estate Forecast for 2021
If trends continue as they have been going you should see median listing prices in San Antonio trend higher with it expected to reach over $302,442.14 before the end of 2021. Furthermore, the average days on the market should continue to remain on a steady decline resting somewhere between the high-40 day and low-50 day range by the end of 2021.
For current homeowners, the increase in home listing prices has been a blessing with the average homeowner gaining $26,581 in home equity between the third quarter of 2019 and the third quarter of 2020 according to a report issued by the National Association of Realtors.
The Impact of COVID-19 On the Market
With COVID-19 continuing to be an issue around the world, it is important to understand the impact that the Coronavirus epidemic has had on the housing market. After all, it has impacted a variety of industries in oftentimes less than ideal ways.
If you are in the real estate market as a landlord, you likely already know that the COVID pandemic has caused increased problems with collecting rents. According to a recent report by National Public Radio (NPR), approximately 30 million Americans are behind on their rent. This crisis has also widely affected millions of landlords, especially those who are small businesses and cannot afford the missed payments.
Furthermore, in research performed by Zillow, they state that 12 Million renters will be behind on their rent by an average of $5,850 by January 2021. However, there are major efforts being worked on in the House and Senate to alleviate these problems.
However, there is a bright light for those buying and selling real estate. According to data provided by Realtor.com, the median listing price in March of 2020 (when the Coronavirus pandemic started) was $297,495 while it has fluctuated from month to month prices have remained steady. In fact, at one point prices had risen to over $315,000.
Overall, prices are higher than they were in March and the average days on the market have decreased. In March 2020, the average days on the market was 58.5 days and it is now at 51 days. Meaning that people are searching, finding, and quickly closing on their homes.
This trend may be due in part to people having to spend increased time in their homes. With people needing more space for remote working and to do things like work out which had been restricted during the lockdowns, many people are looking for more space and are willing to pay a premium for it.
Population Growth in SA
As stated earlier in this article, on average there were 66 new San Antonians a day in 2020. This trend is only expected to continue. Since 2010, when the last census was conducted (2020 Census results were not yet available at the time of printing) the population was estimated at 1,326,161. Since then the population of San Antonio has grown by 16.7% and is only expected to rise.
The rise in population is largely due to an increase in job opportunities. While unemployment has risen to 6.3 percent in October 2020, which is still 0.4 percent below the national average of 6.7 percent. Meaning that, overall, San Antonio’s employment outlook is fairing much better than the United States overall.
Furthermore, according to the Texas Labor Market Review performed by the Texas Labor Commission, employment opportunities are still strong in Texas overall. Help wanted postings have increased by 1 percent in November and are outpacing the unemployed. This is a good signal.
Moreover, with the average hourly earnings in Texas at over $27, unemployment should decline steadily in 2021 as the COVID-19 vaccine is rolled out and life goes back to normal. While unemployment is high, these numbers are in large part due to shutdowns caused by the virus.
Keep in mind that unemployment rates are lower than the national average in San Antonio, so the labor market is still strong and will recover as both Texans and Americans continue to make strives against the virus.
San Antonio’s Rental Market
According to the San Antonio Board of Realtors, based on the most recent available data, residential rentals are up by 2 percent over 2019 with $14,088 new rentals by November 2020. The average price of rent has also increased by 2 percent from $1,489 a year ago to $1,525 by November 2020.
On a monthly analysis, rentals are down by 4 percent compared with the same time last year. However, rent prices are up by 6 percent. We believe that while things may be dire due to COVID-19, things are certainly looking up for the San Antonio rental market due to the increased efforts of Congress and the new vaccine that has been rolling out.
Airbnb Is Legal in SA
Airbnb rentals are legal in San Antonio. To qualify for the short-term rental option, you will need a rental permit from the City of San Antonio. However, this is only applicable to properties within the San Antonio City Limits. For those properties that reside in Bexar County but outside the city limits of San Antonio, they will need a Hotel Occupancy Tax Account set up with the City of San Antonio Finance Department as owners will need to collect Hotel Occupancy Taxes.
According to the New York Times, home rentals are outperforming hotels since the onset of COVID-19. In the same article, Brian Chesky, co-founder of Airbnb, stated that according to their projections the Airbnb market is going to be stronger than ever before. He believes this because people “don’t want to be in crowded hotel districts” but that they “want to travel.”
While 2021, might not be the right year to purchase a rental property just for Airbnb purposes. If you do have a rental property and are looking for a way to make money in a depressed economy, changing those rental homes into short-term rental locations may be a good idea over traditional rental options.
Should You Invest in the San Antonio Market in 2021?
While there is much bad news going around, the outlook for the real estate market in San Antonio is still strong. According to Freddie Mac, also known as the Federal Home Loan Mortgage Corporation, the housing market is strong, despite the challenges associated with the COVID-19 pandemic.
Mortgage rates are low, with a 30-year mortgage at 2.66 percent and a 15-year mortgage at 2.19 percent. These lowered rates are likely the reason why many Millennials, often first-time homebuyers, are looking to purchase a new home.
Affordable Real Estate in San Antonio
Housing is affordable in the San Antonio - New Braunfels area. The median home value is $221,860, while according to Zillow the national value is $264,351. Home values are expected to continue to rise, making now a good time to purchase for any reason, especially investment purchases.
According to the National Association of Realtors, San Antonio area homeowners have gained $26,581 in home equity in the last four quarters. This is much more than the average US homeowner who has only seen a $16,096 equity gain.
Furthermore, over the last three years, San Antonio homes have gained $53,654 in total equity which is $6,056 over the national three-year equity gain average. For those wishing to make a long-term investment, San Antonio is a great place to set yourself up for success.
Neighborhoods with High Appreciation
To gain the most value in a home, those who are investing in real estate should play the long-game. If you’re looking to spend the least amount of money upfront for the largest return on investment, it may be a good idea to invest in a home that is in an up and coming community. Here are the top five communities with the highest expected home value increase, according to Zillow.
* Collins Gardens: Collins Gardens is located near the south side of San Antonio. In the last year, home values have increased by 13.5 percent and are expected to continue to rise by nearly 12 percent during 2021. With median home values priced well below most San Antonio homes, this neighborhood can be a great place for those with a long-term investment plan.
* Denver Heights: Since 2019, the home value for Denver Heights has increased by 22.4 percent and is expected to rise by 11.7 percent in 2021. According to My SA, this neighborhood has become one of the trendiest areas in San Antonio. With the typical home value of a Denver Heights home $161,741, young professionals looking for a large ROI on their real estate investment should definitely consider this neighborhood.
* Braun Station: Homes in the Braun Station neighborhoods of San Antonio are expected to increase in value by up to 11 percent in 2021. Values tend to be in line with the median home value for San Antonio. With all the increased interest in Braun Station, this neighborhood can be an investor’s dream.
* Encino Ranch: Another great neighborhood that will help you to maximize your investment is Encino Ranch. While homes are typically valued at over $400,000, prices here have steadily increased. Values rose by 9.9 percent between 2019 and 2020 and are expected to rise by 11 percent in 2021.
* Dellview: The Dellview area is located near North Central San Antonio. Homes in this area tend to be priced well below the San Antonio median home value and come in at around $165,242. Over the past year, prices rose for Dellview area homes by 7.4 percent and are expected to rise by 10.8 percent in 2021.
San Antonio Suburbs Worth Watching
Not looking to live or invest in real estate within San Antonio’s city limits? Here are some San Antonio area suburbs that might be a good choice for you.
* Windcrest: With a typical home value of $257,375, Windcrest home prices are slightly above the median home value of a San Antonio home but still below the national average value. During 2020, values for homes of the San Antonio suburb rose by 6 percent and are expected to continue to rise by 10 percent in 2021. Recently named the best San Antonio suburb to buy a home in, now is a great time to get in on this market.
* Boerne: Recently noticed for being the second-best school district in the San Antonio area, Boerne is every young family’s dream destination. While homes in the area are priced above the national average, prices are still expected to rise by 9.2 percent in the coming year. Making this a great spot to invest or gain equity in.
* New Braunfels: Ranked 25th in Money’s 50 Best Places to Live for 2020, New Braunfels, Texas is also home to one of the best school districts in the San Antonio area. With all these accolades, it’s no wonder that homes in the New Braunfels area are expected to increase in value by nearly 10 percent in 2021.
* Schertz and Cibolo: The towns Schertz and Cibolo share many things, including a highly-rated school district that also serves Universal City. Housing prices in the area are forecasted to rise by 9.7 percent over the next year in both towns, making this a great spot for both investors and your standard homeowner.
* Olmos Park: The wealthy enclave of Olmos Park, Texas is another hot suburb of the San Antonio area. Median home prices for this area are in the low $700,000 range but many homes in the area are selling for well over $1 Million. If you are wise about your investment, Olmos Park has great potential for good returns.
Looking to find your own investment property in the San Antonio area? Work with Better Homes and Gardens Real Estate HomeCity today. It may just be your first stop on the road to building wealth.