Jul 224 min read

Real Estate Trends: San Antonio's Home Price Cuts On The Horizon

Prepare For The Buyer’s Market: A Major Market Shift Is Approaching

“In the middle of difficulty lies opportunity.” — Albert Einstein

Since the first interest rate hike post-COVID, there have been numerous predictions of a real estate market crash. Media outlets and content creators have frequently raised alarms. This article aims to provide a professional and data-driven analysis of market cycles, rather than predicting a market collapse.

During COVID-19, real estate prices and demand soared. Naturally, what rises must eventually settle. Unlike sensational headlines, our analysis is rooted in data, trends, and firsthand market insights. As Realtors, we consistently communicate with other professionals and stay attuned to the real estate market's fluctuations.

It's important to note that market shifts may not be uniform across all regions or neighborhoods in San Antonio. While some areas remain high in demand, the overall market is beginning to show signs of change. Though current numbers don't yet indicate dramatic shifts—average days on the market haven't exceeded 100 days, and average home prices haven't plummeted—however, a deep look into the data suggests upcoming changes in the San Antonio real estate market.

Market Overview

The real estate market in San Antonio, Texas, is experiencing significant changes. Inventory levels are rising by an average of 542 listings per month, and active listing prices are starting to drop. As seasoned real estate professionals, Kristina and I monitor these trends closely, pulling market numbers weekly and even daily to provide our clients with accurate insights and advice. It's our job to be in front of the market and now running after it! Accordingly, we predict that a major drop in home values is likely, and it may come faster than we originally anticipated.

Market Overview

Let's start with this snapshot of the real estate market in San Antonio from the beginning of the year 2024:

Month	New Listings	Sold Listings	Pending	Active Listings	Median Price	Average Price	Days on Market	Sale to Listing Price Ratio	Avg. Price Per SQFT	Months of Inventory	Average Rental	Homes < $200k Share	Luxury Homes' Share of Sales	Highest Sold	Lowest Sold
January	4,030	2,018	2,551	11,935	$290,000	$359,987	69	92.60%	$173	4.3	$1,786	13.4%	15.40%	$4,190,475	$45,000
February	4,011	2,697	2,634	11,974	$295,000	$348,961	80	93.10%	$173	4.3	$1,785	10.8%	13.40%	$2,900,000	$20,000
March	3,244	5,912	2,761	12,495	$310,223	$370,824	79	94.40%	$178	4.4	$1,820	10.0%	15.50%	$5,400,000	$31,250
April	4,767	3,188	2,833	12,727	$310,000	$378,171	77	94.50%	$181	4.5	$1,883	9.2%	16.50%	$4,649,000	$35,000
May	5,541	3,472	2,848	13,768	$314,000	$371,202	69	94.80%	$178	4.9	$1,889	9.85%	15.92%	$5,300,000	$40,000
June	5,386	3,239	2,833	14,643	$314,900	$378,392	64	94.80%	$177	5.2	$1,913	10.55%	17.47%	$4,195,000	$15,000

Year Over Year (YoY):

Month	New Listing	Sold Listings	Pending	Active Listings	Median Price	Average Price	Days on Market
June 21	4,476	4,024	3,400	5,096	$292,600	$345,114	26
June 22	5,399	3,674	3,036	7,721	$348,200	$400,875	29
June 23	4,659	3,354	2,761	10,505	$320,950	$395,524	64
June 24	5,386	3,239	2,833	14,643	$314,900	$378,392	64

Highlights and Observations

Increasing Inventory: There has been a significant increase in inventory month-over-month. Sales cannot keep up, leading to a growing surplus in the market. Compared to two years ago, the number of homes on the market has nearly tripled from 5,096 to 14,643.
Consistent Yet Declining Sales: While sales remain relatively consistent, there is a noticeable downward trend year-over-year. Although home prices have held steady, the number of price changes in active listings recently suggests an impending shift.
Price Reductions: Growing inventory is exerting pressure on current home prices, causing them to decline. Active listings are currently being reduced by an average of 10%, yet many still do not receive offers or showings.
Seller Challenges: Many sellers are struggling to find buyers, leading to further price reductions, cancellations, and withdrawals.
Quick Sales for Competitive Listings: Homes that sell quickly tend to close near or below the original listing prices, indicating they are competitively priced and/ or in excellent condition making them the best deals available.
Steady Days on Market: The average days on the market for homes that sell remains around 70 days, a significant increase from a couple of years ago when it was around 26 days. Properties that do not sell; linger much longer, further pulling down overall prices.

The San Antonio real estate market is about to undergo a notable shift.

While it hasn't officially started yet, and many may disagree with this assessment, we believe this is the direction we are heading, see graph below.

SOURCE: TEXAS NATIONAL ASSOCIATION OF REALTORS www.texasrealestate.com

Understanding Market Types: Buyer’s Market vs. Seller’s Market

Buyer’s Market: This occurs when there are more homes for sale than there are buyers. In a buyer’s market, buyers have the upper hand, and sellers may need to lower prices or offer incentives/concessions to attract buyers and offers.
Seller’s Market: This happens when there are fewer homes for sale than there are buyers. In a seller’s market, sellers have the advantage, often receiving multiple offers and selling above the listing price.

Tips and Advice for Navigating the Coming Market

For Buyers:

Get Your Finances in Order: Secure mortgage pre-approval and have your finances ready to move quickly.
Be Patient but Prepared: With more options available, take your time to find the right home but be prepared to act fast when you do.
Negotiate Wisely: Leverage the current market conditions to negotiate better prices and terms.

For Sellers:

Assess the Need to Sell: If possible, consider holding off on selling until the market stabilizes.
Consider Alternatives: Explore options such as renting, getting a home equity loan, or owner financing.
Competitive Pricing: Price your home competitively to attract buyers quickly.
Enhance Appeal: Make necessary repairs and updates to make your home more appealing.

For Investors:

Timing is Key: The current market conditions present a favorable time to invest, especially if you have the capital and can hold for a year or two.
Look for Opportunities: Focus on properties that are competitively priced and have high potential for appreciation or profit.
Diversify Your Portfolio: Consider various types of properties to mitigate risks and maximize returns.

The real estate market in San Antonio is entering a period of significant change. While the market hasn't officially shifted yet, the data suggests an impending transition. As your dedicated real estate professionals, Kristina and I are here to guide you through these changes, providing expert advice and support. Whether you are buying, selling, or investing, understanding the market dynamics and adopting the right strategies will ensure a smooth and successful experience.

Please note that these predictions are based on our expert knowledge of the market. When making decisions about buying, selling, or investing, always discuss your specific situation with a trusted professional. Let's navigate these changes together and keep San Antonio a great place to live!