If you’re looking at buying or selling in San Antonio in 2019, here are 7 things the experts want you to know!
In case you haven’t been keeping up with the San Antonio housing market lately, let us bring you up to speed: 2018 was a pretty wild ride.
Exceeding expectations in every way, this past year held record-breaking sales, proving that people of all shapes, sizes, and ages are eager to buy homes in the San Antonio metro area. The result? Houses got snatched up fast, and prices shot up to accommodate supply and demand.
But what does 2019 have up its sleeve? If you’re looking at buying or selling anytime soon, we’ve got your back. Here are 8 things the experts are banking on the next 12 months.
1. Creeping Mortgage Rates
Ugh, we aren’t happy about this one either, y’all. Considering the Federal Reserve’s newfound obsession with raising mortgage rates (four times in the last year), it’s no surprise that buyers are getting a little spooked by the home loan process.
But while some experts are predicting that 30-year fixed rates will shoot above five percent this year, we’re forced to consider the silver lining: our research predicts that lenders will react favorably to this increase in rates, expanding their customer base to include (and maybe even favor) low-income borrowers and first-time homebuyers. Hopefully, this increased access to credit will support more home buyer demand,
2. Limited Supply, High Demand
According to the San Antonio Board of Realtors (SABOR), 2018 was “the year of the seller’s market.” We’re inclined to agree. Whereas a theoretically “balanced” market tends to have about six months of supply (the amount of time it would take to sell every property on the current market), San Antonio has boasted between three and four for the past year. Needless to say, buyers and agents have been burning the candle at both ends to snatch up their dream property when it comes available.
In 2019, experts are predicting that inventory will increase, even if just slightly. Unfortunately, this might be because some buyers are getting discouraged. Whether they’re scared of another recession or simply tired of searching for houses they can’t afford, buyers will taper off, and prices should ease off a bit as a result.
Homes under $199,000 (like 11302 Potter Valley, shown above) accounted for 11,807 home sales in 2018, down 7.5% from 2017.
3. Eased Price Growth
We never thought we’d have such mixed feelings about San Antonio’s record-breaking sales numbers. While, yes, this signals great things for our city’s growth and economy...we were tired of constantly (and quickly) seeing the numbers tick higher and higher. And, though local economists are forecasting continued price growth, the growth rate is set to grow considerably. Buyers can take a deep breath.
As Gilbert S. Gonzalez, SABOR’s President and CEO, assured San Antonio home buyers: “Even though prices have risen, San Antonio’s housing market continues to be among the most affordable of the large cities in the state. That affordability combined with job growth across many industries like tech, medical and military make this a desirable place to buy and sell property.” Phew.
4. A Strong Economy
Does all this talk of 2019 trigger a little post-traumatic-housing-market-crash twitch in your eye? You’re not alone.
However, it’s important to note that while this rise in mortgage rates and housing prices hurts, they do signal something wildly important to our economy: historically low post-recession rates and prices are a thing of the past.
As one expert put it: “powerful economic performance are factors that outweigh housing crash indicators.” Hallelujah. Thanks to factors like job growth and high employment rates, the data proves that the United States’ economic performance is more than just “promising.” It’s reliable.
5. The Millennial Frenzy
The long, arduous, hair-pulling wait is over: Millennials are finally buying houses! Congrats, y’all. It’s your time to shine. After years of speculation about this generation’s confusing absence from the national real estate market, buyers in this age group are settling down en masse. Realtor.com even predicts that this generation will even overtake Generation X in successful mortgage loans in 2019 (coming in at 45%).
Odeta Kushi, a senior economist for First American, put it this way: "The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.”
6. Hello, New Construction
The logical answer to “not enough homes”? Build more! Considering the nearly 200 new communities in San Antonio proper (and way more if you take New Braunfels and Boerne into account), home builders in Bexar County are doing just that. Experts are predicting that new construction will continue to rise in 2019 to satisfy the principals of supply and demand.
7. Rise in Homeownership
This one is sneaky. Because mortgage rates are rising and the market seems to be cooling a bit, experts are predicting that big-level investors and house-flippers will take a step back (house flipping is actually at an all-time low right now!). Assuming that this is the case, there’s a chance homeownership rates will increase:more homes will be sold to single-family buyers who actually plant to live in the homes they’re purchasing.
8. Growth in Higher Price Brackets
Though inventory is tight, it seems that the average buyers in the San Antonio raised their budgets. In 2018, home sales for mid-level and luxury price brackets raised significantly from the prior year: 1,715 homes above $500,000 were sold (up 13.1% from 2017), and 16,521 homes between $200,000 and $499,000 were sold (up a whopping 17.8% from last year)! Meanwhile, sales $199,000 and under numbered 11,807, down 7.5% from 2017. It seems San Antonians are doing well for themselves.
The Moral of the Story?
Think higher home prices and mortgage rates are going to stop San Antonio residents from buying houses? Think again. Though inventory is tight, buyers are taking extra measures to stand out above the crowd. With a booming economy, strong city growth, and rising rates of Millennial homeownership, it’s looking 2019 will be a good (albeit interesting) year for the San Antonio housing market.
Thinking about buying or selling in San Antonio? We’d love to set you up with the perfect KW agent, introduce you to a lender, chat about your mortgage possibilities, and figure out what type of property you’re looking for. Download a FREE copy of our exclusive Buyer’s Guide (created specifically for the SA-area buyer), and get in touch!