San Antonio Real Estate Market Report | January 2024

Hey there friends and neighbors. It’s been a wild ride in real estate lately, but I’m thrilled to dive into the San Antonio market with you.

Using January 2024 data, let’s uncover the latest trends and insights together. So, buckle up for an exciting journey reviewing the San Antonio Real Estate Market.
Let’s look at the numbers, San Antonio is becoming more of a buyers market, according to the data. Rocket mortgage shows prices holding steady but shows prices down slightly and Redfin shows prices down huge. The Redfin data is much more volatile going from $256k in Nov up to $268k in Dec and the back down to $250k in Jan.

Now let’s look at Rocket Mortgages internal metrics. For the second month in a row Rocket mortgage is reporting only a 1% increase in listing on the marking but there was a 25% decrease in home sold. We also saw days on market inch up from 70 days to 71 days and the number of houses selling below listing price increased 5% from 61% to 64%.

Here is the only piece of contradicting data. Fox News San Antonio reported an 11% increase in home sales in January due to slightly lower interest rates. It doesn’t correlate with any data I am seeing but it got a lot of headlines in the news.

Now, let’s take a look at our late February assessment of the market. In late February we showed 2.4 months of inventory on the market, up significantly from the 1.7 months of inventory we saw in January. Here is the problem. I am using a slightly different data source for this data so please take this with a grain of salt. I believe that the data is directionally correct, that the market is weaker, but I am not sure it is that much weaker.

My assessment of the San Antonio real estate market in January 2024 suggests that I may have misjudged its strength. Instead of the slight increase I anticipated, the market appears to have slowed significantly. This slowdown is evident across multiple data points, indicating a notable decrease in real estate sales activity.

One significant factor contributing to this slowdown is the recent uptick in interest rates. Rates have begun to rise again, as the likelihood of federal reserve rate cuts has diminished, further impacting buyer sentiment and affordability. However, there is a glimmer of optimism as we approach the spring season, traditionally a stronger period for home sales. It’s possible that we may witness an uptick in activity during this time, potentially offsetting some of the current market sluggishness.

Overall, while the current state of the San Antonio real estate market appears to be slower than anticipated, the upcoming seasonal shift could provide some relief and renewed momentum in the months ahead.
Now, let’s review Bill’s business. Last month at this time we had 2 houses listed for sale on the MLS. By this time I was hoping to have both of those houses under contract. Thankfully, 1 of those 2 houses is now under contract. We have also purchased 1 other townhouse and we are taking possession of the two mobile homes on two acres in Garden Ridge this week. We’re receiving a ton of showings on the more affordable houses listed on the MLS especially over this last week. I am hoping to get that house sold and off our plate.

Regarding the duplex, the situation with one of the heirs suing us over ownership is still ongoing, but we are almost done. I need to get a couple of documents notarized and then I can tell the whole story.
We are continuing to scale back our business. We are finishing up the stuff that is in the pipeline and then will look very hard at how we will continue to run our business going forward.
Deanna continues to kill it in her land flipping business. She sold 1 property and bought 2 new properties. One of the new properties is already under contract to be resold. She is doing amazing work and I am very jealous of her success.

Let’s take a closer look at what’s happening in the San Antonio apartment market. I’ve been noticing a lack of new projects starting in San Antonio for a while now. This is still true, however according to the San Antonio Business Journal, over 14,000 new apartments are expected to be completed in the next year. These projects got underway in 2021 and 2022 when interest rates were low, and rents were rising by more than 10% each year. With all these new apartments coming onto the market, it’s likely that there will be more vacancies, and landlords may need to lower rents to attract tenants. Some experts are predicting that San Antonio will continue to have a shortage of single-family homes. What I expect to see is that some families who would prefer to rent a single-family home might end up renting an apartment because it’s more affordable.

At our property, The Annex, where I serve as a general partner, we’re pleased to report that performance remains strong, with a 92%occupancy rate and 96% rent collection. However, both myself and the management team are increasingly concerned about the type of mortgage we have on the property. We’re actively exploring options to eliminate our variable-rate mortgage.

Last month, I expressed the belief that the San Antonio single-family housing market had bottomed. However, I now realize that assessment was incorrect. We continue to observe weakness in the housing sector, driven by the consistent rise in mortgage rates. While I anticipate a potential uptick in real estate activity due to seasonality, I am no longer as confident in this prediction.

As our business slows down its purchasing of new inventory and focuses on selling our current stock, it’s clear that market conditions are challenging. While I still don’t foresee a major correction in the single-family housing market for 2024. I am only 99% confident in this prediction. Last month I was 100% confident.

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