San Antonio Housing Market Report Mid-Year June 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.

We are halfway through the year, and the San Antonio housing market has seen some noteworthy changes. Looking toward the second half of the year, we'll delve into key market trends, the impact of factors like mortgage rates and affordability, and explore the future of the San Antonio real estate market.

Let's begin by examining the key highlights from June 2023:

• The number of homes for sale increased by 47% compared to the previous year, offering homebuyers more choices.

• Average days on the market increased to 64 days, up by 35 days compared to a year ago. 

• New listings entering the market decreased by 14% compared to a year ago, but have risen by 38% since the start of the year.

• Homes under contract fell by 13% from the previous year. 

• While homes sold declined by 9% compared to a year ago, they have experienced a remarkable 92% increase since the beginning of 2023.

• Monthly inventory levels reached 3.7 months compared to 2.3 months in June 2022. 

• Median home sale prices decreased by 6% year over year to $320K.

• Homes sold closer to their list price in June at 95%, indicating a stronger negotiation position for sellers.

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

Balancing Supply and Demand

“The rise in inventory indicates a more balanced and normalized market, following the rapid price growth and heightened sales activity experienced during the COVID-19 pandemic,” noted Marisa Jackson, Agent Success Manager, Realty San Antonio.

With the inventory of homes for sale reaching 3.7 months, compared to 2.3 months in June 2022, the market is moving towards equilibrium. This provides favorable conditions for sellers looking to list their homes during the peak summer buying season.

“If you’re needing to sell your home, now is a great time. The later in the summer you list, the more likely the property will need a little discount to make sure the house isn’t sitting on the market for too long once schools are back in session – or even later as we approach the holidays. To maximize profits, sellers should work with a trusted real estate advisor when listing their home for sale,” said Marisa Jackson, Agent Success Manager, Realty San Antonio.

Factors Shaping the Market

Two key factors shaping the housing market are median sales prices and closed sales. Despite median home prices declining year-over-year, dropping from their peak in May and June 2022 at $348K, prices have still shown a significant 40% increase since 2019. This sales price growth indicates a resilient and rebounding market, with properties gaining value year over year.

Closed Sales in June may have lagged compared to the previous year, possibly due to the impact of current mortgage rate conditions on buyer purchasing power. The uptick in mortgage rates, as shown in Freddie Mac’s Primary Mortgage Market Survey, averaged 6.78% as of July 20, down from last week’s 6.96%. Though U.S. inflation hit a two-year low at 3%, economists believe rates could remain above 6.5% for a while longer.

“If mortgage rates stay below 6.5% or ease lower, we expect a surge in home buyer demand, leading to a reduction in available inventory. Home prices will have even more support than we’ve already seen in 2023. This will be important to pay attention to in the coming months, to see how market dynamics respond to rate changes,” said John Coake, Head of Sales at Realty San Antonio.

Leasing and Rental Environment

Renting has become a popular choice for some potential buyers due to affordability constraints and hesitations about entering the market. Homeownership is the primary means for households in the U.S. to build wealth. The Texas State Affordable Housing Corporation offers resources, including down payment assistance and fixed-rate mortgage loans, to support potential homebuyers.

Pro Tip: If you’re a potential first-time home buyer, explore our guides on qualifying for a home loan, essential questions to ask, overcoming down payment myths and affordability resources to get started.

Texas Legislation and Affordability

Affordability remains a key concern statewide, leading to legislative efforts aimed at addressing the issue. The Texas Legislature raised the homestead exemption from $40,000 to $50,000, providing homeowners increased leverage and insulation against rising property taxes.

“Waiting for lower mortgage rates or home prices may not be a viable strategy as access to affordable housing remains a challenge. Affordability should be a focal point, ensuring that housing suitable for all price points is developed in San Antonio,” said Marisa Jackson, Agent Success Manager, Realty San Antonio.

Outlook for the Second Half of 2023

The San Antonio housing market is expected to remain relatively robust in the near term. Mortgage rates may decline slightly as the Federal Reserve adjusts monetary policy in response to decelerating inflation. This could provide higher purchasing power for potential buyers. While home price volatility typically occurs during the peak buying months, no significant swings are anticipated for the rest of the year. Inventory levels are likely to level out, still favoring a seller's market but becoming more balanced.

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

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