From the cover
A changing market
BY EDMOND ORTIZ & ERIC WEILBACHER
Put in perspective
What you need to know
April median home prices
2020 2021
2022
Interest rate changes The Federal Reserve can combat in ation by increasing interest rates or stimulate the economy by lowering them. Over the past 20 years, the rate has uctuated between 0% and 5.33%. to be more exible. Trinidad said for the baby boomer generation, gains in their home values were tremendous, but many cannot opt to size down due to elevated prices and interest rates. Some of the current situation in the housing market has to do with factors dating back nearly 20 years, said Jose Trinidad, nance and econom- ics professor at Texas State University. “We had a short supply of housing during the entire Great Recession for over 10 years. Not that many new builds were being built, so that led to the short supply by the time the pandemic hit,” Trinidad said. “The pandemic may have been a trigger for a lot of millennials as they were also at the age of household formation, so that put upward pressure on the demand for houses.” Getting that supply moving is compelling sellers
2023
2024
Many homebuyers with available cash and worries about interest rates are purchasing higher-end homes, said real estate agent Deanna Guerrero with Keller Williams San Antonio. She also said many homes priced in the $200,000-low $400,000 range are sitting longer on the market because many rst- time buyers lack funds for a down payment or are concerned about interest rates and in ation. “I see an ever-changing market everyday. It depends on who you’re working with,” she added. Kristi Maxwell, agent with Sotheby’s International Realty, echoed Guerrero’s comments that nancing was typically the biggest factor for most homebuyers in previous years. Today homebuyers have more considerations, such as weighing the costs of homeownership vs. owning a car or being a renter. Some rst-time home buyers that might want to trade up are staying longer in their “starter homes” due to the increased interest rates, Macpherson said. “A big driver of keeping the supply of housing down is the high market rates,” Macpherson said. “The e ect of that really reduces the supply, and that also has an impact on new homes too, since it’s more expensive for builders to borrow money to build homes, because typically they borrow money to pay for the construction.”
+34.92%
-17.05%
+38.9%
+29.96%
+28.8%
6%
5%
+33.22%
5.33%
4%
3%
+40.47%
2%
0.25%
1%
0%
2019
2020 2021
2022
2023 2024
SOURCE: SAN ANTONIO BOARD OF REALTORS COMMUNITY IMPACT
SOURCE: FEDERAL RESERVE, FREDDY MAC COMMUNITY IMPACT
Percent of closing price to asking price The following shows how much above or below the asking price homes sold for.
The bottom line
373 were sold at the asking price, said Erica Gillen Quintero with EXP Realty. Much of the uctuation in prices locally is also simply a matter of supply and demand working within all of the current circumstances, Macpherson said. “When you start getting the actual price down to list and then less than 100%, that’s suggesting weakening in the housing market,” Macpherson said.
Trinidad and Macpherson said they expect at least a quarter of a percent of the current Federal Reserve interest rate to be cut this year, but do not expect much more than that to alleviate market pressures heading into 2025. Getting that supply moving is compelling sellers to be more exible than during the pandemic years. Out of the 1,424 homes sold in the San Antonio area last month, 841 of them were sold under the asking price, and
105%
100%
95%
0%
SOURCE: SAN ANTONIO BOARD OF REALTORS COMMUNITY IMPACT
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