More and more of the visitors at the open houses he hosted said they were from California, Greg Foster noticed. The longtime San Antonio real estate agent saw an opportunity.
“So you’re thinking about moving to San Antonio, Texas. Well, this channel right here is just for you,” he said in a YouTube video, cutting to a quick montage overladen with upbeat hip-hop, showing the Torch of Friendship, Fiesta, the Pearl, and other picturesque San Antonio sites.
After uploading the video on a Friday, by Monday he had multiple calls from out-of-state residents looking to move, two from California and one from New York. In the year since that first video, Foster’s steady stream of YouTube content advertising the city has allowed his team at eXp Realty to cater mostly to people moving from out-of-state.
As the coronavirus pandemic wanes, a growing number of people from California, Washington, and other states where residential real estate is considerably more costly have trickled into San Antonio, where rising home prices still seem like bargains. The vast price difference often gives these buyers an advantage in a housing market that has become red-hot across the country.
Foster would go even further: “It’s out-of-state folks that are really driving things in San Antonio.”
In the San Antonio area, the median price of a house sold in the area jumped 12 percent over the last year and now sits at a record-high of $268,500, according to March data from the San Antonio Board of Realtors. The length of time homes are on the market is shorter now, too. Houses for sale last an average of just 45 days compared with roughly 70 days in 2019 and 2020. Realtor Sara Briseño Gerrish said she saw homebuyers signing contracts even during February’s winter storm.
“It blew my mind,” she said.
There’s no pattern to the kind of out-of-state buyers contacting Foster, he said. They are engineers, police officers, teachers, manufacturing workers, restaurant owners, and military personnel. Most are from California, he said, but many are from Washington, New York, and Utah.
They are people like Travis Campbell, a firefighter who was living in a small town in Colorado where housing prices had been driven sky high by nearby ski resorts. But even here, he has found heightened competition.
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For one 2,600-square-foot house listed for $380,000, Campbell and his wife offered $400,000. The house ultimately went to someone who offered $490,000. Campbell said it was typical of the experiences they were having.
“We would offer so much over the list price, and we weren’t even close. We couldn’t even get in the runnings,” he said. They ultimately secured a house through an off-the-market deal their agent arranged. Campbell said he loves the house they bought, and the only drawback is that it doesn’t sit on an acre of land – something he said he could have gotten had he bought three or four years ago when he started looking.
For many longtime residents in San Antonio, where the median household income hovers around $52,455, the competitive market driven by out-of-town buyers means their dreams of owning a house are getting delayed.
Heather Collins, an accounting manager, gets Zillow push notifications on her phone every time a new listing matching her needs is posted. She has to move quickly.
“You’re kind of rushed,” she said. “You don’t have time to think about it.”
Collins and her husband toured one home in Universal City on a recent Saturday, the same day it opened for showings. Collins liked the home because it was ready for move-in, which is important because she and her husband are financing their home purchase with a loan through the Veterans Affairs department. The VA will guarantee the loan only if the lender’s inspector determines the home needs no major repairs, and even then the loan is guaranteed only up to its appraiser’s “fair market value” determination. This means any offer above the listing price isn’t likely to be financed.
Would-be buyers began submitting offers for the home in Universal City the next night, before Collins and her husband were ready.
The two haven’t found a home yet. “But we are optimistic,” Collins said.
The hot market is the result of a simple supply-and-demand problem, said Tony Ciochetti, a professor of real estate finance and development at the University of Texas at San Antonio, who moved to San Antonio from Boston in 2012.
On the demand side, Bexar County was among the top 10 counties with the most population growth between 2010 and 2019, according to estimates released by the U.S. Census Bureau last year. The county added nearly 289,000 people in that period, breaching the 2 million population mark.
Demographers who spoke to the San Antonio Report at the time said the county’s growth was split roughly half-and-half between migrations and natural population increase. The pace of the out-of-state influx likely has quickened in the past year, as pandemic-influenced work-from-home policies have allowed workers to flee expensive areas of the country while collecting paychecks that go further in relatively cheap areas like San Antonio.
According to the 2021 Texas Relocation Report released by Texas Realtors, a professional membership organization that represents all aspects of real estate in Texas, the majority of out-of-staters moving into Texas in 2019 came from California. (California also was the state with the highest number of people moving out).
Meanwhile, the supply of homes here hasn’t risen fast enough to keep pace with these migrations and existing population growth.
The inventory of available homes in the San Antonio area plummeted in March, according to the San Antonio Board of Realtors. The supply of homes on the market was deemed to last only 1.3 months had no new listings been added. That’s well below the six months typically considered a balance between buyers and sellers.
Another factor depressing supply is high materials costs, particularly for lumber, when it comes to newly constructed homes. Lumber prices are up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm, and the national average cost to build a new single-family home rose $36,000 in the past year to a new high of about $398,000, according to the National Association of Home Builders.
Balancing supply and demand in the San Antonio area will take time, Ciochetti said.
“Real estate is not like producing toothpaste, where you can crank out 100 million tubes a day and it’s on the market shelves. It takes six to nine months to build a house, or maybe a couple of years for a larger apartment project.”
For all the talk of rising home prices, however, real estate agent Briseño Gerrish stressed that there are still opportunities with low-interest rates.
“But if someone’s on the fence, they should probably move now,” she said. “I don’t foresee it slowing down any time soon.”