The City of San Antonio is the seventh most populous city in the United States and the second most populous in Texas, behind Houston. It has an approximate population of 1.46 million residents, known as San Antonians. The metropolitan area, known as the Greater San Antonio area, has a total population of around 2.6 million people, making it the 24th-largest metro area in the United States.
Undoubtedly, San Antonio is one of the best cities in the United States in which to live. It is known for its relaxed way of life, affordability, amazing food scene, high safety rating, and strong housing market.
In this blog post, we will focus on the latter point—the San Antonio Housing Market. Here, we will take a closer look at four reports on the housing market in San Antonio which will give you a clearer understanding of what is happening on the ground currently and moving forward in 2023.
These reports include a look at how the San Antonio housing market is expected to rebound after the effects of the COVID-19 pandemic and how the growth rate for rents in the city is beginning to slow down. We will also focus on the competitiveness that exists within the rental market in the city and look at some of the apartment projects currently in the works. Let’s get started.
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The Housing Market Is Expected to Rebound
According to a report by Realtor.com, per Ramzi Abou Ghalioum, a reporter for the San Antonio Business Journal, San Antonio’s housing market is expected to show positive growth in 2023. This follows a recent slowdown, brought on by factors such as rapid price appreciation and rising interest rates.
The report looked at home sales and price data across the 100 largest metropolitan areas in the United States. In the case of San Antonio, it is expected that home sales in the city will climb 2.5% this year. In terms of average San Antonio housing prices, it is expected that this will increase by around 4.6%.
It is interesting to note that while the expected price appreciation in San Antonio is lower than the national average of 5.4%, in terms of growth in sales volume, it is anticipated that it will far outpace the national rate of change, which is predicted to drop by more than 14%.
Looking at that predicted growth in pricing, this would mark a significant rebound for San Antonio. In the months between June and December of last year, for example, home prices in the area declined by 5.5%.
It is also interesting to note that the outlook for the San Antonio New Braunfels area is quite contrasting to many other US cities, including those which saw an increase in housing prices and local real estate sales during the COVID-19 pandemic.
For example, home sales in Phoenix, Arizona are expected to fall by more than 18% this year, with Sarasota, Florida expected to experience a drop of more than 28%. Within Texas itself, it is expected that the home sales for Austin will drop by 6.6%, along with an expected 3% increase in the price.
Outside of San Antonio, it is predicted that El Paso will experience the highest increase in price changes and forecasted sales this year in Texas. In terms of sales, an increase of almost 9% is forecast, along with a 5.4% increase in price.
The bottom line here is that the cost of purchasing a house in San Antonio will rise in 2023. That is good news if you are planning to sell your property this year, especially if you are planning to sell it hassle-free for cash through iBuyer.com.
The Growth Rate for Rents Is Slowing Down
After experiencing rent hikes during the COVID-19 pandemic, it is expected that growth rates will slow throughout 2023. According to one market analyst, rent growth in San Antonio will decline toward the area’s historical average of between 2% and 3% annually.
Certainly, this is good news for residential tenants in San Antonio, as reported by Madison Iszle in the San Antonio Express-News, who have faced rapidly rising rents during the pandemic. There were a number of causes for this during the pandemic, including more people seeking apartments of their own, construction slowdowns, limited inventory, and the rise in remote working.
Between the second and third quarters of 2022, rents in San Antonio fell by 0.6%. Again, there is a number of reasons for this retreat in rent prices, including a softening of demand and an increase in the construction of apartments and other residential properties.
In the years of the pandemic, rents in the area soared. Between the first quarter of 2020, when the pandemic began, and the third quarter of 2022, asking rents in San Antonio rose by almost 18%, reaching an average of more than $1,240 per month.
This increase also came at a time when the rising cost of housing as well as rising mortgage rates put homeownership out of reach for many people. The majority of the rent growth the area experienced came back in 2021 when there was a rebound following the first, most difficult year of the pandemic.
It’s interesting to note that there is some variance in rent prices depending on the different parts of the city. For example, between the first quarter of 2020 and the third quarter of 2022, the asking rent increased by 21.9% on the North Side, by 19.7% on the Northwest Side, and by 19.7% on the far West Side.
In these submarkets, we are noticing a greater supply as of late, with many new apartments currently under construction. For example, there is 2,200 units in the works on the far West Side, 1,600 in the works on the Northwest Side, and 720 in the works on the North Side, which will help to ease demand.
The Rental Market Is Also Becoming More Competitive
A new report looking at the San Antonio rental market has highlighted how it is becoming increasingly competitive. Currently, for every vacant rental property in the area, there are as many as 12 potential tenants, per Michael Karlis, writing in the San Antonio Current.
This is interesting, particularly how other reports highlight a slowdown in apartments’ asking prices in San Antonio. In fact, San Antonio was named the seventh most competitive housing market in the state of Texas last year, with El Paso at the very top of the list.
To determine the rankings, the report looked at a number of factors. These included:
- The number of days each rental remained vacant
- The occupancy rate of each city’s apartments
- The percentage of renters who renewed their leases
- The share of new apartments completed
A majority of renters in San Antonio chose to renew their leases in 2022. In total, more than 94% of all rental properties in the area were occupied, thereby creating a huge demand for available units.
San Antonio and Texas as a whole continue to attract many out-of-state renters, including many from California. They are attracted to the state’s affordable lifestyle along with excellent job opportunities in high-income sectors. While this has increased competition within the rental market, the strong pace of apartment construction has helped to reign this in somewhat.
According to this report, San Antonio sits behind El Paso, McAllen, Dallas, Forth Worth, Central Texas, and Austin in terms of the most competitive rental markets in 2022.
Interestingly, the rental market in San Antonio in 2022 was considerably hotter during the peak rental season compared to the first part of the year. In the first part of the year, the average time a rental unit was vacant was 33 days. In the peak rental season, this vacancy period was reduced to 29 days.
To note, when we speak of the first part of the year, we are referring to January to April. When we speak of the peak rental season, we are referring to May and August, when demand is at its highest.
Apartment Projects Are in Works
As we have highlighted above, a considerable number of apartment projects are in the works in San Antonio. For people interested in moving to San Antonio or those who are struggling with high rent prices, this should come as good news.
As of right now, there are a total of 12 apartment projects in the works in San Antonio, according to Steven Santana from MySA. This includes both renovations under new ownership and projects that are ground-up builds. Combined, these apartment projects will result in more than 3,800 new units in the San Antonio area.
Let’s take a look at these San Antonio-area apartment projects currently in the works. First up is the Tobin Estates Phase 3 project, which will result in 359 additional units. Construction on this project is due to commence imminently.
Construction of a new apartment complex in New Braunfels, known as the Oka Run Village, began in October of last year. It has an expected completion date of January 2025 and will include 330 new units.
The 1800 Apartments project on Center Point Road, close to the Tanger Outlets in San Marcos, will result in 330 new apartments once completed. The Josephine, an ongoing project located at W. Josephine St, will result in 261 units.
A large new community is currently being developed near Texas A&M University’s Southside campus. Known as VIDA San Antonio, this community will have a grand total of 1,400 units.
The Potranco Commons project, located on the far Westside, will result in 360 affordable apartments being built. A similar number of apartments (334 to be exact) are under renovation in Leon Valley. This project is known as Parc 410.
Construction of a new 32-storey luxury apartment tower, known as 300 Main, began in April last year. Located on Soledad St, it will result in the creation of 354 new apartments. On W. Commerce St, a 16-storey apartment high-rise is planned to bring in 255 new apartments. The project is on the site of the old Continental Hotel in downtown San Antonio.
The aptly-named Elmira Street Apartments project will result in 263 new apartments. This is a seven-story, $54 million luxury apartment complex that will include a ground-floor restaurant.
Other smaller projects in the works include the Katherine Courts Apartments (27 units) and Pine @ Carson (21 units).
Key Takeaways on the San Antonio Housing Market
There is a lot of information that we can take from the above reports when it comes to the San Antonio housing market in 2023. Certainly, it is encouraging to note that the housing market in the city is expected to rebound. This is especially true for homeowners who are planning to sell either their primary property or a secondary home.
Both the average price of a property in San Antonio and the number of home sales in the city are expected to rise in 2023, by 4.6% and 2.5%, respectively.
It is also interesting to note that the growth rate for rents is slowing down, at the same time that the rental market is becoming more competitive. With an increase in the asking price for rents during the COVID-19 pandemic, it is expected that this growth rate will slow to historical averages in 2023.
San Antonio, and many other cities in Texas, is quickly becoming an attractive option for people relocating from states such as California. This is increasing competition for available rental apartments, with an average of 12 potential tenants for every available rental unit in the city. Competition is highest during the peak rental season, which is noted as between May and August.
Lastly, it is encouraging to note that several apartment projects are in the works in the San Antonio area. This includes the 1,400 units project underway near Texas A&M University’s Southside campus. More residential properties on the market will help to make it easier for the public to find accommodation in San Antonio.
If you are looking to sell your house with a cash buyer without the usual hassle of selling on the private market, sell it through iBuyer.com.
