San Antonio Real Estate Market Report June 2023

Hello friends and neighbors!

It’s time once again for my thoughts on the San Antonio Real Estate market.

☛ According to Rocket Mortgage, San Antonio is still experiencing a sellers’ market. It appears that Redfin agrees saying that the San Antonio market is somewhat competitive. Upon analyzing the data, we observe that more homes are being listed than sold, though I’m unsure if this is typical for thistime of year.

Interestingly, Rocket Mortgage and Redfin disagree on the median home price for this month. Rocket Mortgage reports it as $289,000, while Redfin states it as $280,000. Additionally, there has been a slight increase in the days on market, rising from approximately 55 days last month to 57 days this month. Moreover, the number of houses sold below the asking price has also seen a small rise, from about 50% last month to 51% this month.

☛ For a real-time update, as of late July, there are slightly more than 1.75 months of housing inventory on the market. This is still relatively low, but an increase compared to the 1.5 months of inventory we observed in June. Historically, 3 months of inventory is considered normal, but we are definitely witnessing an uptick in the amount of inventory available.

☛ Here is my take on this: Yes, we have observed a slight slow down in the San Antonio real estate market. I believe this is directly co rrelated to a slight uptick in 30-year mortgage rates. In November 2022, 30-year rates reached a 15-year high, just above 7%. They then gradually declined through the early part of the year, settling at just above 6% in early February. However, these rates have been steadily climbing throughout the summer, reaching almost 7% once again in July. I believe this increase in mortgage rates has contributed to the slight slowdown in the San Antonio real estate market.

Nonetheless, I still feel that the San Antonio single-family market remains healthy, and I do not anticipate housing prices falling drastically anytime soon.

☛ Now, onto Bill’s business. The mobile home that we put under contract in March, which I mentioned last month, has actually closed! Similarly, the other house we had on the market, which we were selling through owner financing and had gone under contract in our last update, has also closed!

However, the house that we did a light rehab on has not sold yet. It seems to have plumbing problems, so finding the right buyer for that one might be necessary. On a positive note, we had another house that we purchased, and after cleaning it out, we put it back on the market. Surprisingly, that house went under contract with an investor who had previously backed out of a contract on the house we did the light rehab on. This turn of events is good news for us.

☛ Moreover, we are currently working on a flip, but it looks like we will have to address the foundation, which we were hoping to avoid. Additionally, we have a duplex that is expected to complete probate proceedings in August, and we are eagerly looking forward to selling that property.

☛ Overall, things are looking a little bit better in our business. It’s great to see some successful closings and potential opportunities on the horizon. We will continue to work diligently to make the most of these developments.

☛ Now, let’s talk about the San Antonio multi-family market. I must say, there doesn’t seem to be much activity happening currently. I recently listened to a podcast where the host emphasized that we should be patient because there will be deals coming. They mentioned that loans will becoming due, presenting opportunities in the future. It reminded me of when I was just starting in real estate in 2008. Back then, I didn’t have nearly as much experience as I do now, but I don’t recall people saying, “Just wait,the single-family mortgage crisis is coming.” It seems that when everyone knows something is coming, the impact may not be as severe because people are prepared and can take measures to mitigate its effects. Think Y2k.

☛ A friend of mine had the only new development deal that I had heard about recently, but unfortunately, it fell through, at least temporarily. In my circle of acquaintances, I haven’t seen any new deals or anyone raising funds for new multi-family projects. This includes other experienced investors whom I would consider investing with. Furthermore, I haven’t come across any new multi-family deals in their investment portals either. It’s evident that there is a definite slowdown in new development and the trading and rehabbing of existing properties in the San Antonio multi-family market.

I feel blessed that the property where I am a general partner, the Annex, is going pretty well. Rent collections have been excellent, and tenants appreciate the upgraded apartments and are willing to pay a little more for them. Considering the fact that we bought this property at the peak of the market, I feel very fortunate to be part of this deal.

☛ In summary, the multi-family market seems relatively quiet at the moment. Many are waiting for a collapse that I personally don’t anticipate. While there will be deals coming, I don’t believe we will experience the same kind of crisis as seen in the single-family market in 2008. If there is any sector that may suffer, it could be the office space market, probably not the multi-family.

However, I do expect some adjustments in multi-family prices. Some investors might not achieve their expected profits, and there could be instances of distressed selling where seasoned investors can acquire properties at a discount. Nevertheless, I don’t foresee a complete collapse of the multi-family market with prices dropping significantly, say 20 or 30%. I believe that as distressed assets become available for sale, there will be sufficient capital in the system for investors to seize those opportunities and turn those properties around.

☛ Overall, I think the San Antonio single-family market is healthy. The current trend is definitely toward a slower, more balanced market. Everything indicates that the market is in good shape; it still remains a sellers’ market, and I am going to keep buying. However, I might lower my offers a little to account for the slower market. On the multi-family side, I hear that sellers are starting to lower their prices, but not enough yet to entice buyers who still believe there are better deals coming. We will continue to monitor the markets and update you on what is happening.

𝙒𝙚 𝙖𝙧𝙚 𝙖𝙡𝙬𝙖𝙮𝙨 𝙡𝙤𝙤𝙠𝙞𝙣𝙜 𝙛𝙤𝙧 𝙞𝙣𝙫𝙚𝙨𝙩𝙤𝙧𝙨. 𝙍𝙞𝙜𝙝𝙩 𝙣𝙤𝙬, 𝙄 𝙖𝙢 𝙡𝙤𝙤𝙠𝙞𝙣𝙜 𝙛𝙤𝙧 𝙖 𝙫𝙚𝙧𝙮 𝙨𝙥𝙚𝙘𝙞𝙛𝙞𝙘 𝙞𝙣𝙫𝙚𝙨𝙩𝙤𝙧. I am in need of someone to loan my LLC $115,000 for the property at 5611 Chase Canyon. We have owned this property for 5 years, and it is currently valued at approximately $225,000. When we initially acquired it, we took it subject to the original mortgage, and now the previous owner wishes to have the mortgage removed from his credit report. While selling the house could bring us a significant profit, we truly love its location, and it has been an excellent rental property for us.

Our plan is to refinance the property eventually at 6% using a conventional loan. However, until interest rates decrease, we are seeking an investor who would be willing to lend us $115,000 at 8%, amortized over 30 years, with a balloon payment due in 5 years. The loan will be secured by a deed of trust and promissory note filed with Bexar County, and it will be backed by the house and our LLC.

𝙄𝙛 𝙮𝙤𝙪 𝙝𝙖𝙥𝙥𝙚𝙣 𝙩𝙤 𝙠𝙣𝙤𝙬 𝙨𝙤𝙢𝙚𝙤𝙣𝙚 𝙬𝙝𝙤 𝙢𝙞𝙜𝙝𝙩 𝙗𝙚 𝙞𝙣𝙩𝙚𝙧𝙚𝙨𝙩𝙚𝙙 𝙞𝙣 𝙩𝙝𝙞𝙨 𝙤𝙥𝙥𝙤𝙧𝙩𝙪𝙣𝙞𝙩𝙮, 𝙥𝙡𝙚𝙖𝙨𝙚 𝙨𝙚𝙣𝙙 𝙖𝙣 𝙚𝙢𝙖𝙞𝙡 𝙩𝙤 𝙗𝙞𝙡𝙡@𝙟𝙗𝙗𝙡𝙘𝙖𝙥𝙞𝙩𝙖𝙡.𝙘𝙤𝙢 𝙤𝙧 𝙝𝙚𝙡𝙥𝙛𝙤𝙧𝙝𝙤𝙢𝙚𝙤𝙬𝙣𝙚𝙧𝙨𝙨𝙖@𝙜𝙢𝙖𝙞𝙡.𝙘𝙤𝙢.

On another note, my wife Deanna is currently in the process of purchasing land. If you or anyone you know would like to loan Deanna an amount ranging between $20,000 and $30,000 at 9%, the loan will be secured by the piece of land and her LLC. Please feel free to reach out to us for further details.

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