Recent forecasts suggest that home prices within the San Antonio, Texas real estate market could rise more slowly in 2019 than last year. But don’t let that fool you. It’s still a very competitive market due to population growth, constrained inventory, and other factors.
In fact, a recent report by Zillow showed that the percentage of purchase offers that were above the listing price increased during the second half of 2018. That trend indicates a housing market with strong demand from buyers.
It also sends a clear message to those who are planning to buy a home in San Antonio in 2019: be ready for some competition.
Buyers Are Making Strong Offers in San Antonio
Earlier this month, the real estate information company Zillow published a report showing a nationwide decline in the number of home-buying offers that were above the list price.
To quote that report:
“As of December, 19.4 percent of homes were sold above their list price, the lowest share of above-list sales in almost three years. December marked the seventh straight month in which this rate dropped…”
But a few housing markets across the country bucked the trend by experiencing an increase in the number of offers above the list price. San Antonio, Texas was one of them.
Within the San Antonio real estate market, about 44% of homes sold during the second half of 2018 received offers from buyers that were above the listing price. That was the highest percentage among the nation’s major metropolitan areas.
According to Zillow’s research team: “San Antonio is demonstrating strong demand [for housing] commensurate to its rapidly growing population…”
Population Growth a Major Factor
As mentioned above, population growth has a lot to do with the current housing market in San Antonio, Texas. Strong demand from buyers has caused an increase in the number of offers above list price. That’s largely because there are more buyers in the market today, but not enough inventory to go around.
According to the U.S. Census Bureau, the population of San Antonio grew by nearly 14% from 2010 to 2017. That’s more than double the national rate of growth during that same period (5.5%).
The city’s population has risen above 1.5 million people. The population for the broader San Antonio-New Braunfels metropolitan area is fast approaching the 2.5-million mark.
Population growth has increased demand for housing, on both the rental and purchase side. This in turn has put upward pressure on home prices and increased demand within the local real estate market.
Housing inventory, meanwhile, remains tight in the area. According to Grant Lopez, the 2019 chairman of the San Antonio Board of REALTORS®:
“While inventory has remained tight, hovering between 3.2 and 3.6 months, it has not discouraged buyers from getting into the market.”
A balanced market has closer to five or six months worth of supply. So the San Antonio real estate scene is still a bit tight. Inventory in the area does appear to be on the rise though, and that could produce a cooling trend down the road.
According to the local Board of REALTORS, the median (or midpoint) sale price for the area rose to $225,600 at the end of 2018. The average sale price was around $260,000 at that time.
Strong Local Economy Gives Housing Market a Boost
San Antonio’s housing market is also getting a boost from having a strong local economy.
At the end of 2018, the unemployment rate for the metro area was down to around 3.2%. That’s a big improvement, when you consider that it peaked above 7% in the wake of the Great Recession.
Not only does this lure new residents to the area (as shown in the population figures from earlier) — it also gives local residents the confidence and financial means needed to purchase a home. And both of those things tend to increase housing demand.