San Antonio is one of the best places to visit, and has one of the fastest-growing economies in the country, driven by sectors such as military, tourism, health care and insurance. Home prices in the San Antonio real estate market have risen by around 5% in the last twelve months. Even though the market has cooled off a bit, the home values are expected to keep climbing in 2020 as well. Demand will continue to be high in the San Antonio housing market.
34,430 single family homes were sold in 2019, representing a 7% year-over-year increase. There is a lot of construction activity going on especially in the entry level single family homes to satisfy the principals of supply and demand. This will bring in more number of small prospective buyers looking for homes under $200,000. There are a number of reasons to consider investing in the San Antonio real estate.
There is an increase in affordability due to increase in development. San Antonio is a major city in south-central Texas with a rich colonial heritage but it exhibits a low cost of living which is about 3.3% lower than the US. Texas rivals California and New York in terms of population and economic clout. The Lone Star State is also attracting people from those states and the rest of the country, though it gets more than its fair share of immigrants from other countries, too. Is it going to be one of the hottest real estate markets for investors throughout 2020?
Rising prices may keep some from participating in the market, high property taxes can deter the expected growth, but the reality is San Antonio continues to rank as one of the best places to live across the country. In the latest quarter, real estate appreciation rate in San Antonio has been around 1.95%. If it remains steady, the annualized appreciation rate would be around 7.8%, which could trigger off massive interest in the San Antonio real estate investment opportunities.
In this article, we shall discuss some more important reasons why you may want to consider buying San Antonio investment properties in 2020. Please note that there are many variables that can potentially impact the value of a home in San Antonio (or any other market) and some of these variables are impossible to predict in advance.
Top Reasons to Invest In San Antonio Real Estate
San Antonio Real Estate Market Forecast 2020
What are the San Antonio real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home price in San Antonio have appreciated by 33.6% from $138,000 to $184,322. In the past year, the San Antonio home prices increased by 4.8%. Last year saw was the seventh consecutive year of home price gains. The latest San Antonio real estate market forecast is that home prices will increase by 1.9% in the next twelve months.
However, according to many experts the market has cooled off a bit and you shouldn’t expect any sizable or significant gains based on current market conditions. The latest real estate data from Zillow shows that the current median home value in San Antonio is $184,322. San Antonio is currently a buyer’s real estate market – which refers to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.
Here is the San Antonio, TX real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 1.9% till Dec 2020.
The median list price per square foot in San Antonio is $123, which is lower than the San Antonio-New Braunfels Metro average of $130. Zillow reports that 13.4% of the listings in San Antonio had a price cut in Dec 2019, which is a good thing for buyers. The median price of current listings in San Antonio is $234,999. The median rent price in San Antonio is $1,300, which is lower than the San Antonio-New Braunfels Metro median of $1,350.
San Antonio Housing Market Forecast 2019 – 2021
Here is a short and crisp San Antonio housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for San Antonio is 73 and it is predicting a positive trend. The LittleBigHomes.com estimates that the probability for rising home prices in San Antonio is 73% during this period. If this price forecast is correct, the San Antonio home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the San Antonio Real Estate Market Forecast.
San Antonio Real Estate Market Trends
We shall now discuss some of the most recent housing trends in the San Antonio area and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region. San Antonio has been one of the hottest real estate markets in the country for many years.
Let’s first take a look at some of the historical data. According to a report published in Sanantoniotxforsale.com, 2018 was a fantastic year for San Antonio real estate market. One of the largest driving forces behind the thriving real estate market is the growing economy. The San Antonio area is a hotbed for new jobs, and not just any jobs. According to KSAT12, job growth in the region is specifically focused within several pivotal sectors, including technology and cybersecurity.
Despite challenges with low inventory levels, the San Antonio real estate market shattered records and continued to perform well in 2019. As per the report released by San Antonio Board of Realtors in Dec 2019:
- 34,430 single family homes were sold in 2019, representing a 7% year-over-year increase.
- The average home price was just over $270,275, which also was a 4% year-over-year increase.
- The median home price was about $233,800, which was a 4% year-over-year increase.
Trulia has currently 9,040 resale and new homes for sale in San Antonio including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. As per the real estate company called Neigborhoodscout.com, the median house price in San Antonio is $160,697, which indicates that home prices in San Antonio are near the national average for all cities and towns in the United States. Three and four bedroom single-family detached are the most common housing units in San Antonio. Other types of housing that are prevalent in San Antonio include large apartment complexes, duplexes, row houses and homes converted to apartments.
Currently, there are 6,612 single family homes for sale in San Antonio, TX on Zillow. Additionally, there are 1,442 single family homes for rent in San Antonio, TX. Under potential listings, there are about 89 Foreclosed and 175 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
In the past month, 1307 homes have been sold in San Antonio, TX on Redfin.com. In addition to houses in San Antonio, there were also 265 condos, 178 townhouses, and 109 multi-family units for sale in San Antonio last month. The median listing price is around $244,000. According their statistics, the San Antonio housing market is somewhat competitive. Homes in San Antonio receive 1 offers on average and sell in around 53 days.
The average sale price of a home in San Antonio was $207K last month, up 4.5% since last year. The average sale price per square foot in San Antonio is $116, up 6.4% since last year. A hot listing in San Antonio can sell for around list price and go pending in around 23 days.
Here is the latest San Antonio housing market data for the month of Jan 2020 from Redfin.com. The sale to list price ratio shows us that it was a trending more like a seller’s real estate market in the past month.
San Antonio Real Estate Market Trends
|Median List Price||$244,000|
|Avg. Sale / List||97.6%|
|Median List $/Sq Ft||$125|
|Median Sale Price||$207,000|
|Median Sale $/Sq Ft||$116|
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. There are currently 11,368 homes for sale in San Antonio on Realtor.com. The asking price of single family homes can start from $20,000 and can go up to $5.5M for a luxury property located in The Dominion neighborhood in the city of San Antonio, TX. The Dominion is a popular neighborhood with the median home price of $747,000. The Dominion has low crime rate. You’d find a lot of and newer homes and homes with large lots in this neighborhood.
Another popular neighborhood with low crime rate is Timberwood Park where the median home price is around $398,000. There are 480 homes for sale, ranging from $38.5K to $1.4M. Alamo Heights has a median listing price of $625K, making it the most expensive neighborhood in San Antonio. Highland Hills is the most affordable neighborhood, with a median listing price of $146,000.
San Antonio has a mixture of owners and renters, with 54.52% owning and 45.48% renting. There are currently 2894 rental properties in San Antonio and their rent prices range from $385 to $315K per month. The median rent price in San Antonio is $1,450. According to Realtor.com, 880 is the number of newly listed homes within the last week. There are 4519 new construction single family homes for sale in San Antonio within a price range of $125,000 to $3.3M. You can find affordable new construction homes in East San Antonio neighborhood with the median listing price of $195,000.
According to their data, in January 2020, San Antonio housing market was a balanced market, which means there was a healthy balance of buyers and sellers in the market. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. Despite being a balanced real estate market, the sellers have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 98.71% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher. The median list price of homes in San Antonio, TX was $243.3K in January 2020, trending up 3.5% year-over-year. The median listing price per square foot was $125.
The median list price in San Antonio is $257,087 on Movoto.com. The median list price in San Antonio was less than 1% change from January to February. San Antonio’s home resale inventories is 5,392, which increased 0 percent since January 2020. The median list price per square foot in San Antonio is $129.
As you can see in the graph, the median price per sq ft in San Antonio rose to its peak value in Apr 2019, when it was $128. In Dec 2019 it was $127. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in February
San Antonio is a minimally walkable city in Bexar County with a population of approximately 1,326,420 people. If you are looking to invest in the San Antonio real estate, you should that three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your San Antonio investment real estate and you should be able flip it for a lump sum profit.
The neighborhoods in San Antonio must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools and shopping malls. Some of the popular neighborhoods in San Antonio are Dignowity Hill, Terrell Heights, Terrell Hills, Mahncke Park, Castle Hills, Stone Oak, Alamo Heights, Hollywood Park, Alamo Ranch, Helotes, Lavaca, Tobin Hill, Highland Park, Monte Vista and Elm Creek.
Here are the 10 neighborhoods in San Antonio which have experienced the highest real estate appreciation since 2000 (List by Neigborhoodscout.com).
San Antonio-New Braunfels Housing Market Area
The San Antonio-New Braunfels Housing Market Area (HMA) encompasses eight counties in south-central Texas. The principal city of San Antonio, the seventh most populous in the United States, is in Bexar County. The city of New Braunfels, in Comal and Guadalupe Counties, is 30 miles northeast of the city of San Antonio. Surrounding Bexar County, Atascosa and Wilson Counties to the south, Bandera and Medina Counties to the west, and Kendall County to the north complete the HMA.
According to a 2016 publication by Huduser.gov, economic conditions in the San Antonio-New Braunfels HMA have improved since 2010, with nonfarm payrolls expanding at an increasing rate each year. Payrolls increased by an average of 13,600 jobs, or 1.7 percent, annually from 2001 through 2008 and reached a high of 860,400 jobs, which included the 2,000 manufacturing jobs added in 2006 when Toyota Motor Corporation opened an $850 million manufacturing facility.
As a result of the national recession, which lasted from December 2007 until June 2009, payrolls in the HMA declined in 2009 by 15,900 jobs, or 1.8 percent. The effects of the national recession were moderate in the HMA, in part because of strong growth in the education and health services sector and the stability of the government sector.
San Antonio, TX Foreclosures And Bank Owned Homes Statistics
According to Zillow’s data, the percent of delinquent mortgages in San Antonio is 1.6%, which is higher than the national value of 1.1%. There are currently 865 properties in San Antonio, TX that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 3,138. In December 2019, the number of properties that received a foreclosure filing in San Antonio, TX was 1% higher than the previous month and 23% higher than the same time last year.
|Total No. of Foreclosures in San Antonio||865 (RealtyTrac)|
|Homes for Sale in San Antonio||3138|
|Median List Price||$215,000 (1% drop vs Nov 2018)|
In San Antonio, the zip code with the highest foreclosure rate is 78252, where 1 in every 416 housing units is foreclosed. 78245 zip code has the lowest foreclosure rate, where 1 in every 950 housing units becomes delinquent.
Is San Antonio a Good Place To Invest in Real Estate?
Is San Antonio a Good Place For Real Estate Investment? Now that you know where San Antonio is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in San Antonio is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
Although, this article alone is not a comprehensive source to make a final investment decision for San Antonio, but we have collected ten evidence based positive things for those who are keen to invest in the San Antonio real estate in 2020. Let’s take a look at some factors that could make 2020 a good year to invest in the San Antonio real estate market.
1. Fast Growth
San Antonio is the seventh largest city in the United States. According to Wikipedia, it was the fastest growing city among those in the top ten. The San Antonio real estate market is seeing property valuations skyrocket because of the challenge of meeting the demand of everyone moving here for work or mere opportunity. The San Antonio housing market is trying to cope with a city growing at roughly 2% a year.
2. Demographic Momentum
The median age of a San Antonio resident is 33 while the average U.S. resident is nearly 38 years old. The average household in San Antonio has 2.8 people while the U.S. household has 2.6. These stats represent a community that is younger and has more children than average. San Antonio’s rapidly growing economy means that many of the children born here will stay here, fueling the San Antonio real estate market for another generation.
3. Clear Growth Channels
San Antonio sits at the intersection of Interstate 35 and Interstate 10. This makes San Antonio a major transit corridor, but it also provides clear lines of growth. Businesses and, eventually, residential development are expanding along these lines. As warehouses and service businesses expand along these major thoroughfares, single family homes and condos follow. You don’t have to worry about where to build – you know the city will expand that way eventually.
4. The Military Rental Market
For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of the outsized military presence. Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment.
5. The Lure of Employment
Why is San Antonio developing so quickly? The answer is the fast growing job market. When a military base closes, this can be a serious blow to the economy of a city. San Antonio turned the closed Kelly Air Force Base into Port San Antonio, an aerospace and industrial park that provides as many high paying jobs as the closed military base. Six Fortune 5000 companies are located here.
Toyota built a manufacturing plant in San Antonio. Automotive suppliers like Indo-MIM are moving in to supply companies like Toyota, adding to the employment base while diversifying it beyond tourism and defense. In short, the San Antonio real estate market is bolstered by many moving in who hope to find work even if they don’t have a job today.
6. Excellent Profit Margins for Landlords
San Antonio has a dearth of affordable housing because demand is so much greater than the supply. This has created a large number of renters who need to pay quite a bit to rent apartments or single family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two month inventory.
7. Lower Cost Investment Opportunities for Landlords
Texas overall is seeing the housing market shift. In 2011, two thirds of homes sold cost less than $200,000. In 2017, these same homes were only two fifths of those sold. When you compare the price mix of different Texas real estate markets, Houston and Fort Worth have seen a significant increase in homes costing $200,000 to $400,000, while the San Antonio real estate market is skewed cheaper. If you’re buying rental real estate, you can find more homes that are cheaper than average here than you could other hot Texas markets.
8. Limited Supply Keeps Rents and Property Values Up
San Antonio has been hit with a double whammy with regard to its efforts to meet housing demand. San Antonio has lagged behind other Texas cities in the recovery of its home building industry; housing starts grew by 63% in San Antonio since 2011 while rising by 181% in Austin. This means the fast growth of neighboring cities like Austin is sucking in the talented craftspeople that would be needed to build more homes in San Antonio.
The shortage of construction workers means that home prices are still going up while it takes longer to meet demand than it does in Dallas-Fort Worth, Austin and Houston. The matter was only made worse by the number of people who moved down to Houston to aid in the rebuilding there after Hurricane Harvey.
9. The Redevelopment Potential of the South Side
San Antonio’s new construction has been focused on the north side of the city, while the south side has languished. However, the low prices for land and property such a short distance of downtown is leading to major redevelopment in the area. Infrastructure like sewers and new roads are being built on the southern nearly-rural side of San Antonio, especially long neglected areas barely inside Loop 410. The southern riverfront, too, is attracting interest as resorts and hotels pop up along the stretch of river known as Mission Reach.
10. A Landlord Friendly State
The state of Texas has an efficient eviction process. Leases can list repairs the tenants must make at their own expense. Texas doesn’t set a limit on security deposits. The state doesn’t require landlords to have specific security devices in place.
Investing in San Antonio Real Estate or Not: The Conclusion
Maybe you have done a bit of real estate investing in San Antonio, TX but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. San Antonio is a fast-growing city that literally cannot keep up with the population growth, keeping rental rates and property values high. Redevelopment on the south side and as land use shifts creates opportunity.
A good cash flow from San Antonio investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good San Antonio real estate investment opportunity would be a key to your success. If you invest wisely in the San Antonio real estate, you could secure your future. As with any real estate purchase, act wisely. Evaluate the specifics of the San Antonio housing market at the time you intend to purchase.
Hiring a local property management company can help in finding tenants for your investment property in San Antonio. If it is your first time to invest in San Antonio real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in San Antonio real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
The Best Cities In Texas For Real Estate Investment in 2020
Another market to go for diversifying your investments is Dallas. Dallas is a great market because it has a strong economy and a constant population growth and will make your pockets bigger. As rents goes up smart investors should invest in Dallas. Dallas’s local economy is a mix of aerospace, computer chips, telecommunications, transport, energy, and healthcare sectors and the Finance and Business services. These sectors are all providers of good wages which allows for a strong market for Dallas investment properties.
Similarly, Houston is another great market for investing in real estate. Houston, TX is becoming a hotbed of buyer activity that could be really beneficial for real estate investors; just ask the multitude of overseas investors who are choosing Houston as the city of choice to invest in for the foreseeable future. The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.
The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked at 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates and high population of young household were pivotal in the ranking process. The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.
The Central, Cielo Vista and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.
With Austin, Texas, becoming a more diverse city every year, there are plenty of opportunities to take advantage of – from buying new homes to different investing options in the Austin housing market 2019. Austin is a leader across the country with jobs and when you combine that with home prices not as drastically increasing, you’ll get a real estate market that many others envy. Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $350,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.
The Dallas-Fort Worth area is exploding due to its strong job market, low housing costs, and low taxes. The Fort Worth housing market presents an excellent opportunity for investors because it is both cheaper than its big brother and providers a wider variety of properties. The Fort Worth real estate market has a much lower density than the Dallas real estate market. You can find high density housing in downtown Fort Worth, but it is far easier to find horse-friendly properties in the Fort Worth real estate market than the distant suburbs of Dallas. This is, of course, in addition to the luxury housing markets in both cities.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Limited supply of houses and house builders
South Side redevelopment
Market Data, Trends And Statistics