Multi-million dollar homes flying off the market would be a good way to sum up the San Antonio real estate market a few years ago. But times certainly have changed. As the national economic crisis took hold of even the most resilient cities such as San Antonio, buyers were no longer interested in the McMansions that were once all the rage.
Back to Basics
As a result, today’s real estate market in San Antonio is decidedly different. In fact, a good way to now sum up San Antonio’s real estate market is “back to basics.” The San Antonio real estate market, like most other markets in the United States, struggled amidst the credit sector debacle and the national economic crisis. Now that the market seems to be leveling off – and in many cases improving quite nicely – throughout San Antonio, a clearer picture begins to appear.
As San Antonio continues to see an improvement in its real estate sector, it becomes increasingly clear that the McMansions of yesterday can’t take credit for the rebounding market. In fact, it is the entry-level homes – those priced below $200,000 – that are proving to be the most resilient in the San Antonio real estate market. This may be due to several factors, including the first-time home buyer tax credit and the general consensus among homeowners that they no longer want or need an over-the-top home. The entry-level real estate market in San Antonio certainly got a boost from the $8,000 first-time home buyer tax credit. Fieldstone Homes, a builder focused on first-time home buyers, closed nearly 500 homes in 2009, which is about the same number as 2008.
Where Luxury Homes Sales are Heading
In contrast, areas of San Antonio with more expensive homes have seen steep declines in home building. For example, the first three quarters of 2009 saw home building fall nearly 45 percent in New Braunfels and 41 percent in San Antonio’s North Side, when compared to 2008 numbers. It is important to point out that the entry-level market saw steep declines in 2006-2007 as builders began setting their sights on more expensive homes.
Looking Ahead to 2010
There are currently just 1,400 new homes on the ground now in San Antonio. Builders of many different types of homes will need to increase their inventory as they head into 2010 or they may risk very tight inventory. It does appear, however, that San Antonio builders will continue to concentrate on their entry-level market when building new homes because, at least for the foreseeable future – the entry-level market is where the action in San Antonio is.