San Antonio, TX Real Estate Market Trends & Analysis [Updated 2021]

by Than Merrill | @ThanMerrill
Published on Tue, Mar 23 2021

Jump To Another Year In The San Antonio Real Estate Market:

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 has fared slightly better than the national average over the course of the pandemic, which has already helped stimulate the local housing sector. Demand 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 over the last year, local investors may be pleasantly surprised as the year progresses.

San Antonio Real Estate Market 2021 Overview

  • Median Home Value: $205,742

  • 1-Year Appreciation Rate: +7.9%

  • Median Home Value (1-Year Forecast): N/A

  • Median Rent Price: $1,300

  • Price-To-Rent Ratio: 13.18

  • Unemployment Rate: 6.6% (latest estimate by the Bureau Of Labor Statistics)

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

  • Median Household Income: $52,455 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 10.01%

  • Foreclosure Rate: 1 in every 9,345 (1.0%)


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San Antonio housing market

2021 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 nine 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?

There is an investment strategy that may be implemented in any market, and San Antonio is no exception. To be clear, San Antonio is a great place to invest in real estate. In addition to the new environment left in the wake of the Coronavirus, the San Antonio real estate market is poised to benefit investors for several reasons, not the least of which include:

  • The local economy is strong and diverse enough to create plenty of demand for investors’ assets, whether they are rentals or rehabs.

  • Unemployment has improved dramatically since it spiked in 2020, which will give more people the confidence they need to buy or rent a home.

  • Relatively low business costs attract new companies to San Antonio, which inevitably attracts more employees and homebuyers.

  • The city’s relatively low cost of living will attract millennials from around the country, who represent the largest population buyers in the United States.

  • Median home values in San Antonio are expected to increase over the next 12 months, most likely rewarding today’s buyers with immediate equity.

  • The San Antonio real estate market boasts a large population of renters, which bodes well for investors building rental property portfolios.

  • Low inventory levels will create a lot of demand for investors who can procure a property of their own. The Fed’s announcement to keep interest rates low for the foreseeable future will make it easier for buyers to acquire deals from investors.

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 no more than a year ago, 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 are flipping homes this year. The decline is attributed to the presence of the Coronavirus, which 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.

The Coronavirus 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 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 clarify: 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 February, the average rate on a 30-year fixed-rate loan was 2.81%, according to Freddie Mac. February marked one of the lowest average mortgage rates for an entire month since tracking began. As a result, lower borrowing costs 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.

If that wasn’t enough, San Antonio’s price-to-rent ratio is somewhere in the neighborhood of 13.18, which suggests it’s more affordable to buy than rent. Typically, a 13.18 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, resulting in more rental demand. As a result, the San Antonio real estate investing community appears ready to benefit from sizable demand.

2021 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 9,345 homes in some state of distress (default, auction or bank owned), San Antonio’s foreclosure rate rests somewhere in the neighborhood of 1.0%. The national average, on the other hand, is a modestly healthier 0.8%.

The San Antonio housing market appears to have plenty of distressed 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:

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

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

  • 78257: 1 in every 2,818 homes is distressed/p>

  • 78202: 1 in every 4,583 homes is distressed

  • 78225: 1 in every 4,720 homes is distressed

While these zip codes currently have the highest foreclosure rates in San Antonio, it’s important to note that things may change soon. 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 2021.

2021 Median Home Prices In San Antonio

San Antonio’s median home value is $205,742, which is well below the national average. The median home value in San Antonio is approximately $66,704 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 by 70.0%. 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 nine 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 nine consecutive years, which leaves one more important question to be answered: Is it a good time to buy property in San Antonio?

San Antonio real estate market trends suggest homes will increase in value for the foreseeable future, and borrowing costs will remain low for at least a few years. This unique convergence means now could be a great time to buy a house in San Antonio. Not only are prices expected to be higher in the immediate future, but rates will creep up as the economy strengthens. All things considered, the sooner one can buy, the better.

San Antonio Housing Market: 2020 Summary

  • 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: 7.8% (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%%)

San Antonio Real Estate Investing 2020

The San Antonio real estate market was dealt a significant blow in the first quarter of 2020 when the world declared the Coronavirus a pandemic. Not unlike everywhere else, real estate in San Antonio came to a standstill at a moment’s notice. That said, the setback was short-lived and may have actually acted as more of a catalyst than an obstacle.

While activity was halted in the first quarter, the pandemic set several things in motion. For starters, the Fed announced it would keep interest rates low for the foreseeable future. At just under 3.0%, in fact, rates dropped to their lowest point ever. The move was intended to make buying more attractive, and it was more successful than anyone could have hoped for. Low interest rates helped offset years of appreciation and made it more affordable to buy a home in San Antonio. Historically low rates—combined with a government stimulus, a lack of spending, and more saving (all because of the pandemic) made the prospect of buying a home possible for more people than in recent history.

Prospective buyers were given more reasons to buy a home than ever before, and the increase in activity culminated in a wave of competition. There weren’t enough listings in 2020 to keep up with demand, which catapulted home values to their highest point. As a result, investors had to reevaluate their exit strategies. Profit margins on flips grew thin as home values hot up, so more investors turned to long-term rental properties. Low borrowing costs simultaneously increased monthly cash flow from tenants and justified historic acquisition costs. On top of that, the lack of listings meant more people would be forced to rent, even if they could afford to buy. Landlords became the beneficiary of a larger renter pool and one that had more excess capital than in years past.

San Antonio Housing 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 historical 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 Housing 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. However, the one concern for potential homeowners was the city’s price-to-income ratio, which was high compared to historical standards.

The level of construction was 12.5% above the long-term average, which was relative to the previous year and suggested 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 Housing 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. However, on the pricing end, 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 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

Summary

Much like the rest of the country, the San Antonio real estate 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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