California exodus fueling San Antonio’s hot domestic market?

More and more visitors to the open houses he organized said they were from California, said Greg Foster. The longtime San Antonio real estate agent saw an opportunity.

“So you are considering moving to San Antonio, Texas. Well this channel here is just for you, ”he said in a Youtube video, cutting to a quick edit loaded with upbeat hip-hop, showing the Torch of Friendship, the Fiesta, the Pearl, and other San Antonio scenic spots.

After uploading the video on a Friday Monday, he received several calls from out-of-state residents seeking to relocate, two from California and one from New York. In the year since that first video, Foster’s constant flow of YouTube content advertising the city has allowed his team at eXp Realty to primarily reach out to people moving out of the country. State.

As the coronavirus pandemic subsides, growing numbers of people from California, Washington and other states where residential real estate is considerably more expensive have moved to San Antonio, where rising house prices still appear to be a problem. good deal. The large price difference often gives these buyers an edge in a housing market that has become hot across the country.

Foster would go even further: “It’s the people out of state who are really running things in San Antonio. “

In the San Antonio area, the median price of a home sold in the area has jumped 12% in the past year and is now a record high of $ 268,500, according to March data from the San Antonio Board of Realtors. The length of time that homes are on the market is also shorter now. Homes for sale only last an average of 45 days, up from around 70 days in 2019 and 2020. Real estate agent Sara Briseño Gerrish said she saw buyers signing contracts even during the winter storm in February.

“It blew me away,” she said.

There is no model for the type of out-of-state buyers who contact Foster, he said. They are engineers, police officers, teachers, workers, restaurateurs and soldiers. Most are from California, he said, but many are from Washington, New York and Utah.

These are people like Travis Campbell, a firefighter who lived in a small town in Colorado where house prices had skyrocketed by nearby ski resorts. But even here he found increased competition.

For a 2,600 square foot home listed at $ 380,000, Campbell and his wife offered $ 400,000. The house eventually went to someone who offered $ 490,000. Campbell said this was typical of the experiences they were having.

“We would offer so much more than the list price, and we weren’t even close. We couldn’t even enter the race, ”he said. They eventually got a house through an off-market deal their agent made. Campbell said he liked the house they bought, and the only downside was that it wasn’t on an acre of land – something he said he could have gotten if he had it there. ‘had bought three or four years ago when he started looking.

For many longtime San Antonio residents, where the median household Income hovering around $ 52,455, the competitive market driven by out-of-town buyers means their dreams of owning a home are delayed.

Coventry Homes is selling a lot in Coronado, a new planned community in northeast San Antonio with homes from the mid-300s. Credit: Bria Woods / San Antonio Report

Heather Collins, Accounting Manager, receives push notifications from Zillow on her phone whenever a new ad that matches her needs is posted. She must move quickly.

“You’re in a bit of a hurry,” she said. “You don’t have time to think about it.

Collins and her husband visited a home in Universal City on a recent Saturday, the same day it opened for screenings. Collins liked the house because it was ready to move in, which is important because she and her husband are financing the purchase of their house with a loan through the Department of Veterans Affairs. The VA will guarantee the loan only if the lender’s inspector determines that the house does not need major repairs, and even then the loan is only guaranteed until “fair market value” is determined. of its evaluator. This means that any offer above the listing price is not eligible for funding.

Potential buyers began submitting offers for the home in Universal City the following night, before Collins and her husband were ready.

The two have yet to find a home. “But we are optimistic,” Collins said.

The hot market is the result of a simple problem of supply and demand, said Tony Ciochetti, 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 highest population growth between 2010 and 2019, according to estimates released by the US Census Bureau last year. The county added nearly 289,000 people during that time, surpassing the 2 million mark.

Demographers who spoke to the San Antonio report at the time said the county’s growth was split roughly half and half between migration and natural population increase. The pace of the out-of-state influx has likely accelerated over the past year, as pandemic-influenced work-from-home policies have allowed workers to flee expensive parts of the country while collecting checks payrolls that go further in relatively inexpensive areas like San Antoine.

According to Texas Resettlement Report 2021 Posted by Texas Realtors, a professional membership organization that represents all aspects of real estate in Texas, the majority of foreigners who moved to Texas in 2019 were from California. (California was also the state with the highest number of people moving).

Meanwhile, the supply of housing here has not grown fast enough to keep pace with these migrations and current population growth.

The inventory of available homes in the San Antonio area fell in March, according to the San Antonio Real Estate Board. The housing supply on the market would have lasted only 1.3 months if no new listings had been added. That’s well below the six months generally seen as a balance between buyers and sellers.

A construction worker perches on the roof of a house in the new residential neighborhood in northeastern San Antonio, called Coronado.
A construction worker perches on the roof of a house in Coronado, a new residential neighborhood in northeast San Antonio. Credit: Bria Woods / San Antonio Report

Another factor depressing supply is the high cost of materials, especially lumber, when it comes to newly built homes. Lumber prices are up 340% from a year ago, according to Random Lengths, a wood products industry tracker, and the national average cost of building a new home Single-family homes grew by $ 36,000 over the past year to a new high of around $ 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 produce 100 million tubes a day and it’s on the shelves in the market. It takes six to nine months to build a house, or maybe a few years for a larger apartment project.

Despite all the talk about rising house prices, real estate agent Briseño Gerrish pointed out that there are still opportunities with low interest rates.

“But if someone is on the fence, they probably should move out now,” she said. “I don’t expect this to slow down anytime soon.”

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