San Antonio, TX Real Estate Market Trends & Analysis [Updated 2020]

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The San Antonio real estate market has served local investors well over the course of what can only be described as a turbulent marketplace. For starters, the city’s unemployment rate fared slightly better than the national average between March and April, which should help stimulate the housing sector moving forward. The demand which existed prior to the pandemic should receive a slight bump from improving employment numbers, which bodes well for the entire San Antonio real estate investing community. Having already realized better-than-average returns in the first part of 2020, local investors may be pleasantly surprised as the year progresses.

San Antonio Real Estate Market 2020 Overview

  • Median Home Value: $187,718

  • 1-Year Appreciation Rate: +3.8%

  • Median Home Value (1-Year Forecast): -1.7%

  • Median Rent Price: $1,300

  • Price-To-Rent Ratio: 12.03

  • Unemployment Rate: 13.2% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 1,547,253 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $50,980 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 10.01%

  • Foreclosure Rate: 1 in every 6,891 (1.4%%)

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San Antonio housing market

2020 San Antonio Real Estate Investing

The San Antonio real estate market has enjoyed several years of positive growth. Since rebounding from The Great Recession, in fact, real estate in San Antonio has appreciated for nearly eight consecutive years. For what it’s worth, the Alamo City has been firing on all cylinders, which begs the question: Is San Antonio a good place to invest in real estate?

The San Antonio housing market has been a great place to invest over the last decade, and there’s nothing to suggest the same won’t be true moving forward. In fact, Attom Data Solutions’ latest findings point to San Antonio being a great place to invest. Set amidst a national market where gross profit margins are increasing, San Antonio real estate investors were the beneficiaries of the nation’s second largest increase in returns in the first quarter of 2020, trailing only Dallas.

According to Attom Data Solutions, “Metro areas with a population of at least 1 million where returns on investment increased most were Dallas, TX (up 38 percent); San Antonio, TX (up 36 percent); San Diego, CA (up 20 percent); Chicago, IL (up 20 percent) and Oklahoma City, OK (up 18 percent).”

While returns on San Antonio real estate investing are more attractive than ever, fewer people were flipping homes in the first quarter of 2020 than the last quarter of 2019. In all, the number of people flipping homes in the first quarter of 2020 was down 12.9% from the last quarter of 2019 to the first quarter of this year, according to Attom Data Solutions.

The decline may be attributed to the presence of the Coronavirus, which has witnessed “shelter-in-place” orders bring San Antonio’s economy to a halt. That said, the altered real estate landscape has opened up an entirely new world of opportunities for the San Antonio real estate investing community. While flipping remains as attractive as ever, the new housing market boasts several indicators working heavily in favor of buy-and-hold investors.

While the Coronavirus is tragic, it has disrupted the industry in a way that may actually help investors build a passive income portfolio. More specifically, here are a few indicators brought about by the Coronavirus that make buying a rental property in today’s market more attractive than in recent history:

  • Nearly a decade’s worth of appreciation have brought down profit margins

  • Interest rates on traditional loans are historically low

  • Years of cash flow can easily justify today’s higher acquisition costs

  • The price-to-rent ratio suggests housing inventory will be harder to come by

I want to make it perfectly clear: Flipping real estate in San Antonio is still a very viable exit strategy. However, home values have increased year-over-year since 2012. In doing so, attractive profit margins are growing harder to find. Investors should look into long-term strategies that appear more favorable at the moment.

For starters, interest rates are historically low, which helps mitigate today’s high acquisition costs. In an attempt to buoy the economy, the Federal Reserve has announced interest rates will remain low for at least the next couple of years. As of April, the average rate on a 30-year fixed-rate loan was 3.31%, according to Freddie Mac. April marked the lowest average mortgage rate for an entire month since tracking began. As a result, lower borrowing costs are helping to offset today’s higher prices in the San Antonia real estate market. Inevitably, lower borrowing costs will reduce monthly mortgage payments, allowing investors to capitalize on higher cash flow.

Let’s say, for example, an investor purchases a home for $187,718 (the median home value in San Antonio). At the same time, they put down $38,000 at the time of purchase (about 20.0%) to avoid having to pay private mortgage insurance. With an interest rate of 3.31%, the monthly mortgage payment would come out to be about $1,017 on a 30-year fixed-rate loan (after accounting for additional costs like principal, interest, property taxes, and homeowners insurance). It is worth pointing out, however, that the median rent price is $1,300, according to Zillow; that’s a difference of $283 each month. As a result, it’s entirely likely that investors will be able to pay down a newly acquired mortgage with someone else’s money, all while building equity in a physical asset.

San Antonio’s price-to-rent ratio is somewhere in the neighborhood of 12.03, which suggests it’s more affordable to buy than rent. Typically, a 12.03 price-to-rent ratio would impact demand for rental units, but inventory levels are low in The Alamo City. Even those who wish to buy are finding it difficult to do so, which is resulting in more rental demand. As a result, the San Antonio real estate investing community appears ready to benefit from sizable demand.

2020 Foreclosure Statistics In San Antonio

Considering San Antonio’s affordable home prices and relatively low unemployment rate, the city has a higher foreclosure rate than one should assume. With one in every 6,891 homes in some state of distress (default, auction or bank owned), San Antonio’s foreclosure rate rests somewhere in the neighborhood of 1.4%. The national average, on the other hand, is a very healthy 0.6%, or less than half the rate of San Antonio.

In spite of its higher foreclosure rate, San Antonio has made a lot of progress over the last year. As recently as May, “the number of properties that received a foreclosure filing in San Antonio, TX was 68% lower than the previous month and 71% lower than the same time last year,” according to RealtyTrac. To put things into perspective, the national foreclosure rate dropped 38.0% from April to May, and 84.0% year-over-year.

Despite recent declines, the San Antonio housing market appears to have plenty of opportunities for investors, which begs the question: Where can I buy an investment property in San Antonio?

Investors looking for higher profit margins will want to consider some of the best neighborhoods to buy in San Antonio, as they have the highest distributions of foreclosures:

  • 78205: 1 in every 1,361 homes is distressed

  • 78208: 1 in every 1,842 homes is distressed

  • 78220: 1 in every 2,090 homes is distressed/p>

  • 78203: 1 in every 2,234 homes is distressed

  • 78252: 1 in every 2,497 homes is distressed

While these zip codes currently have the highest foreclosure rate in San Antonio, it’s important to note that things may change in the near future. If for nothing else, the presence of the Coronavirus is expected to increase foreclosure rates across the country. Forbearance programs will keep people in their homes for the foreseeable future, but government programs will not last forever. When mortgages are called current, there’s a good chance cities across the country will see a spike in foreclosures, and the San Antonio housing market is no exception. Local investors who position themselves well now may find themselves with more opportunities later in 2020.

2020 Median Home Prices In San Antonio

San Antonio’s median home value is $187,718, which is well below the national average. The median home value in San Antonio is approximately $61,000 less than the U.S. median home value. That said, real estate in The Alamo City has enjoyed a rather good run for the better part of a decade. Despite trailing the national average, San Antonio has come a long way since the recovery from the Great Recession began.

When the San Antonio real estate market bottomed out around the first quarter of 2012, the median home value was about $121,000. Since then, however, the city’s median home value has increased 55.1%. Thanks—in large part—to a strengthening economy, growing confidence in the housing sector, and (ironically enough) a lack of available inventory, home prices have ridden a wave of appreciation for approximately eight years.

Years of historic appreciation have made these the most expensive neighborhoods in San Antonio (according to NeighborhoodScout):

  • Harry Wurzbach Rd / Wurzbach Rd

  • Cross Mountain

  • Trinity U / E Hildebrand Ave/p>

  • City Center

  • Huebner Rd / Jordans Wood Cir

  • S Main Ave / E Durango Blvd

  • Leon Springs / Beckmann

  • Fm Road 2696 / N LOOP 1604 W

  • Fm Road 2696 / Dietz Elkhorn Rd

  • Fm Road 2696 / Ave Cierra

Real estate in San Antonio has had an impressive run for the better part of a decade. Home values have appreciated for nearly eight consecutive years, which leaves one more important question to be answered: Is it a good time to buy property in San Antonio?

It could be argued that now is a great time to buy a property in San Antonio, especially for a long-term investing strategy. “Shelter-in-place” orders have suppressed home values, but the drop is only expected to be temporary. Therefore, the latest decline in home values could represent a window of opportunity to buy. Subsequently, the lack of inventory is expected to compound due to a lack of building in the last few months, which should actually increase prices sooner rather than later.

San Antonio Real Estate Market: 2018 Summary

The San Antonio real estate market, not unlike the rest of The Lone Star State, was incredibly hot in 2018. Not only did median home values continue their historic appreciation, but the rapid ascension kept demand intact. In fact, the San Antonio real estate market catered specifically to the growing number of willing and able Millennials looking to buy a home at the time. At the time, San Antonio was growing rapidly, and it continues to do so to this day.

San Antonio Real Estate Investing 2018

The median home value was the beneficiary of some rather generous appreciation in 2018. More specifically, however, median home prices were on the rise since 2012. Dating back to January of 2012, median home values were as low as $123,000, according to Zillow. In 2018, median home values were an impressive $169,300 at some point.

Even in 2018, San Antonio had a large distribution of foreclosures. While that may sound like a bad statistic for homeowners, there are two sides to every coin: Distressed properties represented a great opportunity for real estate investors two years ago. According to data presented by RealtyTrac, “The median sales price of a non-distressed home was $76,000. The median sales price of a foreclosure home was $94,000, or 24% higher than non-distressed home sales.” For those of you keeping score, that’s an average savings of $18,000 for investors that can find and close on distressed properties.

San Antonio Real Estate Market: 2016 Summary

  • Current Median Home Price: $195,500

  • 1-Year Appreciation Rate: 5.8%

  • 3-Year Appreciation Rate: 24.8%

  • Unemployment Rate: 3.7%

  • 1-Year Job Growth Rate: 2.8%

  • Population: 1,440,900

  • Median Household Income: $52,689

San Antonio Real Estate Investing 2016

The Alamo City was shaping up quite nicely in 2016, according to San Antonio real estate news. Home prices and appreciation rates were on par with the national average, while home affordability, employment and job growth rates were some of the best in the nation. Prices for the San Antonio real estate market grew relative to the previous year, which was at $195,500 in 2016; compared to the national average of $215,767. Appreciation rates outpaced the national average.

Home affordability continued to be the staple of the local real estate market. In the first quarter of 2016, homeowners paid 9.7% of their income to monthly mortgage payments—which was actually less than its historical average of 10.9%—while the national average paid 14.5%. San Antonio real estate was more affordable than most regions across the country in 2016. The one concern for potential homeowners, however, was the city’s price-to-income ratio, which was high compared to historic standards.

The level of construction was 12.5% above the long-term average, which was relative to the previous year and suggests the local inventory was stabilizing. However, the number of single-family housing permits in Q1 was 2.1%, a significant decrease from the national average of 11.3%.

San Antonio Real Estate Market: 2014 Summary

  • Median Home Price: $195,500

  • 1-Year Appreciation Rate: 5.8%

  • 3-Year Appreciation Rate: 24.8%

  • Unemployment Rate: 3.7%

  • 1-Year Job Growth Rate: 2.8%

  • Population: 1,440,900

  • Median Household Income: $52,689

San Antonio Real Estate Investing 2014

San Antonio demonstrated an increased propensity for success in 2014. On the one hand, the San Antonio real estate market continued to keep pace with the national average, as homeowners and investors in the region were the beneficiaries of incredibly brisk sales. On the pricing end, however, San Antonio continued to trail behind that of nearby cities, as appreciation rates for San Antonio were not as high. Having said that, the San Antonio real estate market was more affordable than most major markets around the country, including a hotbed for investor activity.

The average home price in San Antonio was $195,500 at some point in 2014. Even after the high levels of appreciation that swept through Texas, the median home price in San Antonio was nearly $20,000 less than the national average of $215,767. To get to that point, home values appreciated by as much as 5.8% in the previous year, which was 0.3% less than the national average. As a result, the market was healthy and consistent, as gains in the previous three years extended the trend of positive price growth after the recession.

One reason for lagging appreciation rates could have been the number of foreclosures in the area. According to RealtyTrac, the number of San Antonio foreclosures during the month of June was 12.6% higher than the previous month, and 22.0% lower than the same period in 2015.

San Antonio County Map:

Map of San Antonio neighborhoods

San Antonio Real Estate Market Summary

Much like the rest of the country, the San Antonio real estate market has enjoyed a great run for the better pat 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 the ability for investors to simultaneously flip real estate and participate in long-term strategies. It is worth noting, however, that while flipping remains a viable option, current conditions do seem to favor passive income investors.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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