Housing markets have witnessed dramatic upward trends for the last two consecutive years. Despite the pandemic and the current economic turmoil, investors are flooding the space looking for the most promising areas. In a period of monetary uncertainty, properties are becoming an appreciating store of value - a tangible asset with practical utility.
However, not all markets are created equal. Experts warn that many areas across the country are massively overvalued, which makes investment decisions rather tricky. Nevertheless, plenty of opportunities become apparent for those following macro indicators such as local economic activity and demographic trends. San Antonio, for example, is among the leading markets where current trends show no signs of stopping.
Perfect circumstances for the real estate market in Alamo City
According to the San Antonio Business Journal, this area leads the economic boom sweeping over Texas. When we compare the increase in the number of six-figure jobs across the entire state, Alamo City comes at the top.
Furthermore, the US Census Bureau Data indicates that the San Antonio metro area is 8th in domestic net migration. Listed right next to Tampa, the city has recorded an influx of 35,000 people, increasing its population by 1.4% year-over-year.
Developments like these affect renting prices and the value of single-family units. According to the San Antonio Current, rent is up nearly 30%, and single-family homes sell at about a 26% cost increase.
The median home price is $348,800, which generates high demand for new local construction projects. Investors entering the market in San Antonio could look for homeowners that are ready to move quickly and need to sell extremely fast or for quick move-in-homes, which allow fast turnover before prices change.
Investments in commercial real estate
According to SABOR (San Antonio Board of Realtors), commercial properties have appreciated even more than family units, with a 32% increase year-over-year.
Currently, the most significant employers reside in the healthcare and military sectors. Still, there is plenty of economic activity in aerospace, information technology, cybersecurity, and financial services.
The current unemployment rate is 3.5%, which indicates a return to a decade-long downward trend briefly interrupted by the pandemic.
Due to such developments, office space occupancy is growing fast, despite current trends in remote work that remained prominent even after the COVID pandemic.
Jeremy Rushing, who specializes in restaurant realty, gave an optimistic statement for Community Impact. According to his insight, 'there is virtually zero availability at the moment.' He says there are plenty of incentives to build second-generation spaces that will become hot commodities in the broader San Antonio area.
Currently, top employers include the Joint Base San Antonio, H-E-B, the financial services giant USAA, the Methodist Healthcare System, and Toyota Suppliers.
Luxury properties are also in demand.
Due to the demographic and economic trends mentioned above, it is no wonder that luxury properties are also in demand. According to Redfin, there is a 55% yearly growth in the sale of luxury real estate, which is listed across several neighborhoods. These include Elm Creek, Bentley Manor, Woodlands of Camino Real, Champions Ridge, and Heights at Stone Oak, among others.
With six-figure jobs on the rise, it may be wise to look closer at these properties or consider renovating a medium-priced unit. If we look at the market now, remodeling efforts might provide a high return on investment.
Experienced real estate investors often look at indicators other than employment and demographics. It is no secret that schools can significantly influence the price of nearby properties. The same can be said about transport infrastructure, local amenities, and urban landscape.
Because of this, one can argue that the growing prices of San Antonio homes were inevitable and long overdue. The area is home to 1137 schools and 20 universities, catering to its young demographic.
As for entertainment, culture, and outdoor activities, Alamo City offers numerous venues for shopping, dining, sports, nightlife, cultural exploration, and outdoor recreation. The area operates 257 parks, covering more than 15,000 acres of land.
According to AgriLife Today, San Antonio benefits from a rich urban forest that counts 137 million trees. This amount of vegetation saves around $63 million in health costs and saves residents $22 million in energy. Annually, the city is lighter by 6,500 tons of air pollution, thanks to local efforts to maintain such a level of urban vegetation.
High demand seems to be justified when we consider these features and developments. It is easy to see why the area is positioned well for sustainable growth in population, economy, and demand for real estate. For experienced investors looking for lucrative investment opportunities, San Antonio, Texas, might be one of the few hidden gems that are relatively unnoticed at the moment. Things will change as the market is poised for even greater appreciation.