San Antonio Housing Market Report May 2023

In the ever-evolving San Antonio housing market, staying up-to-date with the latest trends and market conditions is crucial for both buyers and sellers. By partnering with experienced agents and understanding the data, you can make informed decisions that align with your goals.

The San Antonio housing market gained momentum towards balance and stability in May 2023, as home prices continued to show signs of recovery and inventory increased. In this blog, we will delve into the latest data and market trends, providing a comprehensive overview of the San Antonio housing market.

So, what happened in the San Antonio housing market in May 2023? Let’s take a closer look:

• The number of homes for sale increased by 81% compared to the previous year, providing homebuyers with more options.

• The average days on the market increased to 65 days, up by 38 days compared to a year ago. However, homes are selling faster than last month. This shorter duration suggests increased buyer activity and competition in the market.

• The number of new listings entering the market decreased by 1% compared to a year ago, however, increased by 11% from last month.

• The number of homes under contract fell by 14% compared to a year ago. Although pending sales have slightly declined over the past two months, they remain higher than the beginning of the year, suggesting continued buyer interest.

• The number of homes sold declined by 14% compared to a year ago, however, closed sales are holding strong month over month.

• Monthly inventory levels saw a positive change, increasing to 3.7 months compared to 1.8 months in May 2022. Housing supply broke the stagnant trend of around 3.2 to 3.3 months of inventory that we have been seeing for the past eight months.

• Median home sale prices decreased by 3% year over year to $324K, however, they have consistently grown for the fifth consecutive month. 

• Homes are selling closer to their list price, with an average sale price reaching 95% of the list price. This indicates a stronger negotiation position for sellers.

• There are over 10,000 homes for sale and over 2,000 homes have reduced their price in the past 30 days. 

Favorable Trends Signal Ideal Selling Conditions

The local housing market exhibited promising trends in May for sellers, with a notable decrease of 5 days in the average days on market, compared to April. Additionally, the number of homes under contract has remained steady for three consecutive months, indicating consistent buyer interest. May saw a 20% increase in the number of homes sold, compared to the previous month, accompanied by four months of consecutive growth in median home sale prices. Furthermore, sellers experienced greater success as homes sold closer to their list price, now at 95% of original asking price in May compared to 93% in January.

“These positive indicators signify an active and more balanced housing market, making it an opportune time for sellers to capitalize on these favorable conditions,” said Marisa Jackson, Agent Success Manager, Realty San Antonio.

Mortgage Rate Relief Unlikely Until End of 2023 or Beyond

After a slight decline, mortgage rates are expected to stay at their current levels for a while in reaction to the Federal Reserve‘s decision to pause its tightening monetary policy in June. In turn, mortgage origination volumes will remain under pressure for the remainder of the year. The Freddie Mac’s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 6.67% as of June 22, down from last week’s 6.69%. The 30-year was at 5.81% a year ago at this time.

Lifestyle and Changing Needs Should Matter More

A recent survey from the National Association of Home Builders found that 18% of adults in the U.S. plan to buy a house in the next 12 months — the highest share ever for the survey, which began in 2018. While mortgage rates play a crucial part in the decision to buy or sell a home, they're far from the only consideration. As Bankrate points out, lifestyle and changing needs can and should matter even more.

"Assessing the opportune moment to buy or sell a home is a deeply individual choice, encompassing a multitude of crucial factors. Before taking the leap, it is essential to ponder significant financial and lifestyle aspects that come into play. Your future aspirations and objectives should play a pivotal role in the decision-making process. Working with a trusted guide can help you weigh the various factors to consider in our local market," said Marisa Jackson, Agent Success Manager, Realty San Antonio.

Housing Construction Sees a Boost Despite Challenges

New residential construction is on the rise with increased housing starts for both single-family and multi-unit projects and a positive builder sentiment. Despite a slight decrease from last year, the number of homes under construction is near its highest level since 1970. Builders are focusing on entry-level homes and affordable housing, downsizing home footprints to cater to first-time home buyers. Builders have downsized the median new-home footprint about 3% year over year, according to the National Association of Home Builders. This presents an opportunity for first-time homebuyers to stabilize their housing costs and invest in homeownership.

Homeownership: A Pathway to Long-Term Wealth

Purchasing a home is a proven strategy for building wealth, with homeowners' net worth approximately 40 times higher than that of renters, according to the National Association of REALTORS®. As homes appreciate in value and mortgage payments contribute to home equity, homeowners experience long-term financial growth. Starting the homeownership journey early can maximize these benefits, as renting delays the opportunity to build equity through monthly payments.

“If you’re thinking about purchasing a home, now is the time to speak with a local professional to explore how homeownership can stabilize your monthly housing costs for the long-term even while other life expenses like rent, gas and groceries continue to rise as we’ve see with recent inflation,” said Marisa Jackson, Agent Success Manager, Realty San Antonio.

Expanded Opportunities for Homebuyers with New Freddie Mac Income Limits

Freddie Mac has released its 2023 Area Median Income Limits, which impact rates, products, and down payment assistance available to homebuyers. These limits provide more options for home buyers. Home buyers can look up a property’s area median income using the Freddie Mac Income Lookup Tool.  Another program to help buyers achieve their dream of owning a home is the Home Possible® from Freddie Mac. This affordable lending program is perfect for low-income borrowers as it allows down payments starting at 3% and more credit flexibility. Find more affordable housing resources in our guide here.

A Hotspot for Population Growth and Opportunity

According to CoStar Analytics, the latest census results confirm Texas leads the country in population with four major markets ranking among the top eight spots for overall growth. Between 2021 and 2022, San Antonio ranked fourth in expansion rate among cities with over 2 million residents, surpassing popular destinations like Nashville, Phoenix, and Atlanta. Much of this growth has been concentrated in the city's thriving suburbs and second cities, such as the far west side, far northwest side, Boerne, New Braunfels, and Seguin. While single-family homes have been driving growth in the suburbs, downtown and midtown areas are experiencing a resurgence in the urban core, fueled by multifamily development. San Antonio's population growth has outpaced other Sun Belt cities like Charlotte, Tucson, and Oklahoma City. Despite the influx of rental supply brought on by developers, the enduring strength of San Antonio's population growth continues to inspire confidence among investors.

Whether you’re a buyer or seller, understanding the latest trends and market conditions empowers you to make informed decisions. Contact a local professional to embark on your real estate journey and achieve your goals at 210-361-6000 or email realtor@realtysanantonio.com.

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