The End of San Antonio’s Hot Housing Market: What to Expect in the Upcoming Months

The San Antonio housing market crash may be at our front doors sooner rather than later. According to the San Antonio Business Journal, home builders are preparing for price cuts and they’re going to “discount the heck out of them.” By the end of this article, you will know which  home builders are planning to have discounts and where the best deals are going to be. 

New Braunfels, the hottest market in the 35 corridor, has slowed down on a 1,900-acre ranch that they had planned on developing. This is insane news because that was the hottest market, according to the New York Times. 

Even apartment investors are looking to slow down their purchases and construction because the demand for them is not what it used to be. “Demand for apartments plummeted in the national apartment market in the third quarter, coming off what had been several quarters of strong run-up in demand and rent growth for the national multifamily market.” Earlier this year, single-family homes were seeing an increase in the amount of homes for rent. In July, rents averaged $1,908, and in August the average rent was $1,888. It did not decrease by a substantial amount, but we should have seen an increase in rents because of the high spike in property taxes and house prices. 

On the other hand, builders are discounting homes and apartment complexes that are not renting. An obvious factor in the slowdown is the increase of interest rates. Rates are now ticking above 7% for a 30-year fixed loan, which is affecting people’s affordability. Not to mention inflation, groceries, and going out.

Compared to other Texas cities, San Antonio remains one of the most affordable Texas cities to purchase a home. That is no surprise because I mention it in all my videos, but let’s look at the numbers. The median home price in the last two weeks, in San Antonio, went from $335,00 to $355,000, even with interest rates between 5% - 7%.  Even the average sold prices of homes have gone from $393,000 to $438,000. So now you have this perfect storm of affordability, more homes, and new construction homes. 

KSAT published a great article with a map of San Antonio, plus the suburbs, with the average home value based on zip codes. Based on the factual statistics of what people are buying and selling, San Antonio still has a very strong market. One of the hidden gems in San Antonio is the Southside. San Antonio developers are building VIDA in the Southside, which is a huge housing neighborhood that will have over a thousand homes all around Brook City Base. 

First American Home is undeterred by the slowing market, and they plan on plowing ahead with their plans to deliver 500 homes per year. This Houston-based company is planning to deliver 500  homes per year, and they just broke ground last month. Chris Hill of First America Homes said, “We are not concerned about rising interest rates impacting us. We believe more people will seek us out as we offer a quality home at a reasonable price.”  This is a good takeaway because other builders are willing to buy down rates, pay your loan fees, close early, and take reduced prices to move their inventory.  

Most home builders like First American Homes, KB Homes, Lennar, DR Horton, and Chesmar own their own mortgage companies so they can offer much more incentives than your traditional bank. Something to beware of is builders telling you that they have given you an incentive but they’re really up ticking the price to make it a wash. That is why I highly recommend having a realtor with you to look over those agreements and to compare rates.

 Be careful when you see those signs that say “$200k and up” because that will typically be the bare minimum of a home, and it is often priced that way so it can seem comparable to other homes in the neighborhood. That’s why it’s important to know the difference between the bait price and the actual price. 

The San Antonio Business Journal reported that, “homebuilders [are] growing nervous about inventory collecting dust on the shelf rather than flying off it are beginning to ramp up measures to incentivize home buying.” 

Sean Chandler, the president of Chesmar Homes’ Central Texas Division, said that, “most homebuilders I’ve spoken to have said they want to close out their inventory by year-end.” He also added that the best time to buy a home will be in the next three months, giving the current circumstances. Median home prices are starting to creep up, and these last 3 months are very important and a great opportunity for you and your family to get a home.