Millennials who want to buy a house should plan to skimp on coffee awhile longer. Homes are getting more expensive, even in the relatively affordable San Antonio area.
There could be a silver lining, however. Inventory has started to catch up, if only slightly, with demand.
The median price of a home in August rose 16% compared to August last year to $298,200. The average price of a home went up 19% in that same period to $353,662, according to figures from the San Antonio Board of Realtors (SABOR), which covers Bexar and surrounding counties.
Going back further, the median price has risen 25% from August 2019, when it was $238,400.
“The problem remains too little inventory and too many buyers,” said Maynard “Doc” Stephens, a real estate agent with Keller Williams. Recent clients he’s helped buy homes have had to compete against other buyers and make offers above listing price.
The stock of available homes is ticking up, however. SABOR reported a nearly 16% increase in inventory over the year prior.
“It’s exciting to see a slight increase in inventory,” said Sara Briseño Gerrish, SABOR’s secretary-treasurer. She said there is now about 1.8 months of inventory, up from 1.6 in July.
“I’m interested to see if inventory continues to climb up in the next couple of months,” she said. The holiday season typically is a slow period for sales.
Growth in new housing stock is outpacing the increase in demand, although it still has a way to go to catch up. Home sales were up only 2 percent from August 2020.
And the pace of sales was still blazing, with homes spending an average of 24 days on the market in August compared to 55 days the month saw in the last two years.
This competitive dynamic in the market, in which homes are subject to multiple offers that usually venture above the listing price, has persisted and become an expected reality over the last year.
Stephens said that when he helps a client sell a home, every now and then he gets a call from someone who lowballs the price and wants the seller to take care of closing costs — “still stuck in last year’s market.”
“I always feel like calling them and asking, ‘Are you sure you want to submit this offer?'”
San Antonio is still more affordable than Texas as a whole, where the median price in August was $315,000, up more than 17% from last year. Similarly, the average price rose to $386,232, a 17 percent increase over last year.
The market has sharpened dramatically over the course of the pandemic. Lockdowns and the new availability of remote work prompted some to seek bigger lawns and more bedrooms. Buyers from expensive markets like Austin and coastal states have been swapping their homes for better deals in San Antonio. Many are eager to lock in cheaper financing as mortgage rates hover at historically low levels.
Hedge funds have also become bigger players on the scene, as the rapid appreciation of homes makes them more appealing as investment opportunities. All-cash purchases also have been on the rise as buyers try to stand out in the competitive market.