Home sales figures continued a downward slide in late 2023, according to the latest market report from the San Antonio Board of Realtors (SABOR).
Dropping by 4% in November compared to the same month the previous year, home sales data reflected market conditions driven by rising interest rates, following historic lows, and lenders tightening credit.
Homeowners held onto their lower rates, which reduced inventory, and while some buyers chose to wait it out and see if rates would drop again, others shopped for new construction, also lured by valuable builder incentives.
In San Antonio, sales of existing homes fell by 17% in November while new home sales increased by 27% over the year before.
The declines in overall sales began with a plunge to 30% fewer sales in January 2023 compared to January 2022, then recovered slightly to 3% less in May, and declined again in early fall to 15% for the month of September.
Houses also stayed on the market for more days than in 2022, up to 35% longer during November 2023 than the year before.
“I had three deals stopped in November,” said Gary Ard, a local real estate agent and investor. “I had clients who just walked away from deals, I had sellers say they didn’t want to sell after all. That was the first time I ever had that in my career.”
Ard estimates he lost about $60,000 in commissions that month.
“The market’s resilience amid changing dynamics is evident through steady pricing trends, increased listings and a balanced inventory,” said Sara Briseño Gerrish, chairwoman of the SABOR board, in a statement that accompanied the recent report. “While there’s a marginal decrease in total sales and pending listings, the market continues to offer opportunities across various segments.”
In San Antonio, home prices held steady, with the average price of $375,845 representing a 2% increase over a year ago in November, the latest monthly figures available.
The median price was $313,975 in San Antonio and $294,975 in Bexar County, which put it significantly lower than other major metropolitan areas in Texas.
In November, homes in Travis County sold for a median price of $535,000; Harris County, $320,000, and Dallas County at $375,000.
In San Antonio, the price range with the highest number of sales, 564, was $300,000 to $400,000 in November, a drop from 610 the year before.
The price range with sales gains in November — $1 million and more — reflects how rising interest rates affect low- and moderate-income borrowers more than the wealthy.
“They’re not injured right now,” Ard said. “They’re not concerned because they’re going to have higher down payments, they’re going to have better access to better interest rates,” or they can pay with cash.
In addition to several homes across the North Side, Ard has a home listed for $915,000 at 417 E. Hildebrand Ave. in Olmos Park. The two-story built in 1928 has been on the market at that price for three months.
A real estate investor from California is interested in acquiring the property, he said, through what’s called a 1031 exchange — the swapping of like property to defer capital gains taxes.
The recent SABOR report also shows that the number of sales of newly built condos and townhomes was up slightly in November.
“It’s getting more popular [with developers] and it has to do with the availability of land” in San Antonio’s urban core versus in other cities, Ard said.
The Navy veteran believes 2024 will be a better year for real estate because he expects the Federal Reserve to reduce interest rates.
Economist James Gaines of the Texas Real Estate Research Center of Texas A&M University predicts that the slowdown of 2023 will continue for the first half of the year and pick up steam when interest rates moderate or decline.
For now, the market is tight with a low inventory of both existing and new homes. But people are still moving to Texas — up to 400,000 are expected in 2024.
“Affordability is tied to interest rates, but there are ways to get around that as long as we have demographic growth,” Gaines said in December. “As long as we have employment and income growth … like we’ve been experiencing for the last 10 years here in the state of Texas, the housing market is still going to be able to maintain and do very, very well.”
