Hello! I am thrilled to share my thoughts on the San Antonio real estate market as we conclude the spring buying season.
🏠 San Antonio continues to be a sellers’ market though at a much slower pace than this time last year. The number of homes added to the San Antonio market was higher by about 2% in March over April but the number of sales in April was down about 20% according to Rocket Mortgage which would indicate a slight softening in the market.
🏠 I am not sure why sales were down in April. The other market internals look good. Average home prices were up about 1% month over month. Days on Market dropped from about 70 days to about 63 days month over month and at the same time, the number of houses selling below-asking price fell from 54% in March to 53% in April, signaling a continuation of strong home buying fundamentals. As I look at the real-time data on 21 May 2023, we are seeing about 2900 active listings in San Antonio and 1900 pending listings meaning we have about a month and a half of housing inventory in the San Antonio real estate market. Three months of inventory is normal in a stable market so we are still seeing strong fundamentals if you are trying to sell a home in San Antonio. If you were looking for a soft real estate market in San Antonio and you didn’t buy this winter, you probably missed the boat.
Let’s look at how our single-family business is doing. The house up in Schertz with a pool closed with very little difficulty and we made a really nice profit on it. The mobile home in Bandera is still under contract. We messed up on this one and accepted an offer with an FHA mortgage and it has been one headache after another. This property is still under contract and has not been sold. In the last week, we have purchased 2 more houses. We have listed one of the houses for sale as well as a house from our personal portfolio. So it will be very interesting next month to see where everything has shaken out.
🏠 Let’s look at the multi-family market in San Antonio. I am going to do the easy one first. Let’s talk about new developments. Nothing is happening on the new development side. I have 2 friends in this industry and both agree that things are slow. There are quite a few new apartments coming online now that were started in the last 2 years and are finishing up now, but as for new builds starting it is very slow. The higher building cost without the corresponding rent increases is putting most new builds on hold as there are poor returns on invested capital.
🏠 On the existing multi-family side, the market is still slow. I am hearing that prices are starting to come down but everything I hear says that we should see more price movement to the downside in the market in late fall and early winter. Unless you have a slamming deal, it seems to be hard to raise capital and now people need to raise a lot more capital because banks are lending at lower loan ratios to appraised value. Remember last month I told you I invested in my first deal in 9 months. I haven’t seen much happening since that time. It seems that a lot of the people are hunkered down and weathering out the storm. I expect the multi-family market to be very slow over the next couple of months until we see more discounts on the pricing. On the property I am a general partner on. It is still performing well. It is basically full and we are still able to raise rents on our upgraded units but even on that property we are continuing to build reserves until we see where the debt markets are going to end up.
🏠 In summary, the single-family market seems to be very stable and we are looking at a very active summer and a balanced market with a slight edge to people selling a house. On the multi-family side, I am expecting it to be quiet with some sporadic deals being done, but I don’t expect to see an active market. I still believe there is a housing shortage in San Antonio, TX and I expect the current market conditions to worsen this problem as builders of both single and multi-family properties slow down or delay project starts. Meaning the real estate market in San Antonio should be good over a 3 to 5-year time frame. I am still a firm believer that investing in San Antonio real estate is an excellent idea and should be a core part of a diversified investment portfolio.
🏠 On a personal note, we are actively looking for one or two more investors willing approximately $100,000 in various single-family properties. Our property avatar is a purchase price of around $100,000 with an after-repair value of about $200,000. We pay 1 percent upfront and 9 percent per year with at least 6 months of guaranteed interest even if we sell the house in 3 months. You will get a signed promissory note and a deed of trust filed with the county naming you as the lender and signed by our Texas House Holder LLC.
If you would like to be added to our newsletter or are interested in investing with us please feel free to reach out and contact me. bill@jbblcapital.com or call or text 210 960 6543.