San Antonio Real Estate Market (Alamo, Howe: rental, loans, new home)

[JNA]

I saw this in an article about the housing market.


"Housing in one hot market, San Antonio, where prices rose 10% in the past year and 40% in the past five years, is still fairly affordable. But it may soon go the way of Miami and Las Vegas. Between 25% and 29% of loans in the city in 2006 were for second homes or investments, according to Freddie Mac.

"It suggests instability in the market," says Robert Shiller. "Prices could drop significantly."

Last of the Red-Hot Markets: Financial News - Yahoo! Finance (broken link)

As I'm planning on moving there spring of next year, I wanted to get some feedback on the conditions out there as it is brutal in many parts of here in Southern CA right now.

[Paka]

I believe that article is misleading...while we HAVE seen appreciation the past several years...SA remains one of those "slow and steady" type of markets...NOT one that you find folks doubling their house value in 2 years in. As such, we have much lower risk for those types of losses...altho real estate is ALWAYS a gamble.

We personally own rental property here in SA as well as our home...but we are in the medical center area with our rental...and because of USAA, the medical schools and the traffic in that area, we do not have rental difficulty. I think the folks that are at greatest risk are those that bought, sight unseen or flew in and bought several houses after taking $$ out of their primary residence expecting the SA market to do what the west/east coast have done...and finding that not to be the case.

[kevcrawford]

Those numbers are inaccurate. We've seen slow and steady growth, and if there's a decline, it'll be slow and steady. Don't see that happening though.

Declines mirror the growth. CA had explosive growth, which led to the drastic drop.

[JNA]

Thanks for the feedback! I'm not really looking for the move to San Antonio for investment as I am doing it more for a lifestyle change. I'm just trying to avoid buying and finding out a year later my new home is worth 20-30% less than when I bought it.

On the bright side, just found out our home will remain within the Reagan HS boundaries, so that should be good for property value.

[Chakapu]

Also, there are pockets of outrageous 'appreciation' (in '' because I don't think it's true appreciation), like our neighborhood, which probably skew things a bit. While I think it'll stay higher than it was, I don't think the excessive appreciation in this 'hood will continue.

[Bayag_Mo_Gago]

Originally Posted by kevcrawford

Those numbers are inaccurate. We've seen slow and steady growth, and if there's a decline, it'll be slow and steady. Don't see that happening though.

Declines mirror the growth. CA had explosive growth, which led to the drastic drop.

You state the Freddie Mac numbers on appreciation and loan percentages (2nd or investment loans) are inaccurate? What do you base your information on? I would defintely believe FM's numbers than some realtor's. One thing I do disagree with is their assessment that SA's housing will decline like FL and Las Vegas. However, a quick check of building permits in SA shows a steady decline. Basically what that means is SA's housing growth is slowing and appreciation is on the decline.

Also, you say that decline mirrors growth. I would like you to show me which cylce you're referring to. Lots of areas in CA had 100% appreciation. So you're going to tell me that we will see 100% decline?

[hello13685]

You are wise to be cautious. Do NOT believe anyone whose livelihood depends on your believing that the market is reasonable. The housing market in SA has slowed considerably. I've been getting listings for months and it's been one price reduction after another. Many homes sit on the market for months and months. I would guess that SA's decline curve is just a tad behind that of the more pronounced "bubble" cities. San Antonio DID have a significant bubble by San Antonio salary/economic fundamentals standards.

[ryneone]

The last two poster are a little outta touch with reality it seems. As in the national trend San Antonio building permits have slowed but it still on pace to be the third most new homes built ever in the market. Prices here have not dropped. Hello's assumption that there was a significant bubble is off base. The prices here did not sky rocket nor did they grows at a turtles pace like other said steady moderate growth. No where have i read that this was an unstable market than before this article.

From April through June of this year, construction commenced on 3,890 single-family homes, according Metrostudy's Q2 2007 report. This figure marks a 27.4 percent decline from the 5,355 new-home starts recorded by Metrostudy for the second quarter of 2006. What's happening in San Antonio now is part of what Metrostudy executive Jack Inselmann calls the "normalization process" of the local housing industry. San Antonio is coming back down to a number the housing market can bear. For the 12 months ended June 30, 2006, San Antonio's housing market recorded 18,861 single-family starts. For the same 12-month period ended June 30, 2007, construction commenced on 16,382 homes, a 13.1 percent decline from the 2006 mark. "The industry is working its way towards its real demand level, which appears to be in the 14,000 to 15,000 annual starts range," Inselmann says. San Antonio's economy is also quite robust. Metrostudy reports that the Alamo City's unemployment rate is at 3.6 percent, lower than the statewide and national unemployment rates of 3.9 and 4.5 percent, respectively. For the past three consecutive quarters, the number of new-home closings has outpaced the number of new-home starts. While construction commenced on 3,890 new homes from April through June 2007, local buyers closed on purchases of 3,991 homes over that same three-month period. As of June 30 of this year, San Antonio had 3,106 finished homes on the ground, which represents about a 2.2-month supply of inventory. By comparison, at the end of second quarter 2006, the city had 1,974 finished units on the ground, a 1.5-month inventory supply. In San Antonio, the supply-demand level is more or less at equilibrium when there is about a 1.7 month supply of inventory. As of June 30, 2007, the percentage of new homes priced below $175,000 was 53 percent; and the percentage of new homes priced above $225,000 was 28 percent.

Courteous of Market*News*and*RECON

[JNA]

At first glance, seing the 40% rise in prices over 5 yrs seems very normal, about 7% per year compounded.

Where I had my first home in CA, we've had declines of 35% from peak prices in less than 2 years so my wife and I are just trying to be cautious.

Then again, prices had doubled here in the previous 5 years, so I guess a correction was overdue here.

I'm planning another visit next month and can't wait to see how the home is coming along.

[Bayag_Mo_Gago]

Originally Posted by ryneone

The last two poster are a little outta touch with reality it seems. As in the national trend San Antonio building permits have slowed but it still on pace to be the third most new homes built ever in the market. Prices here have not dropped. Hello's assumption that there was a significant bubble is off base. The prices here did not sky rocket nor did they grows at a turtles pace like other said steady moderate growth. No where have i read that this was an unstable market than before this article.



Courteous of Market*News*and*RECON

What in the heck are you talking about?? I mentioned the building permits have slowed and what that means is the housing market is slowing and appreciation is also slowing down. Tell me I'm wrong!