Rumors and Realities in San Antonio Real Estate

With the swings in the real estate market today, homeowners are making all
kinds of deals to purchase or sell properties. And with all the creative
arrangements people are exploring to sell or get into a home, small
details regarding insurance can be easily overlooked.

There are three key areas to keep in mind. They are:

1. How vacancy provisions might apply; If you are selling a home and the
   home is vacant, it is imperative you contact your agent to make
   sure the proper coverage is in place. Most homeowner policies will not
   cover a vacant house.
2. How a delayed move-in can create coverage gaps for the buyer; If you
   are a buyer, and will lease back the house to the seller for a
   short period of time, you need to contact your agent (prior to closing) and let them know you won’t be moving in for a while so the proper binder can be sent to the title company.
3. How the parties’ interest in the property can be protected under a
   contract of sale. Assuming the seller doesn’t finance through a formal
   mortgage agreement, the new owner of the home can protect the financial
   interest that the seller has in the property through Additional Insured
   endorsements.

These tips were shared with us by Sally Singley with the Barnard-Donegan Insuarnce Agency. If you have any insurance questions you can contact Sally via email at ssingley@donegan.com.

Some buyers are hesitating to buy their first home now.

We have all seen the headlines, “HOUSING CRISIS…”, “MORTGAGE MELTDOWN…” . And you are worried about the real estate market, or about your ability to qualify for a loan with a good interest rate. Maybe you don’t want to make a move yet, because you’d like to wait until you think the market is going to hit bottom.

But did you know that RIGHT NOW is the best time to buy? Buying an owner-occupied house is based on the local market, and it’s based on YOUR family’s needs and capabilities.

The San Antonio real estate market remains strong, despite what is happening elsewhere. If you can afford the monthly mortgage payments, then seize this opportunity to provide your family with the security of owning their own home. In fact, right now IS the best time to buy your first home. Why?

1. Long-term appreciation. Although real estate values operate on a cyclical market (increasing, then decreasing, then increasing), over the long term, appreciation is over 7% in San Antonio. So if you’re buying a long-term family home that you plan to leave for your children, the short-term market fluctuation shouldn’t affect your plans.
2. High inventory level. Right now, there are over 11,000 homes for sale in San Antonio, according to the MLS. New homes offered by builders are coming with huge incentives. In this buyers’ market, you’re in the driver’s seat!
3. Sellers are more willing to negotiate. Quite simply: more houses for sale = more choices for buyers = more leverage to negotiate better price and terms! Of the 11,000 homes for sale in San Antonio, 1,000 of those have already been reduced in price.
4. Great quality loans available. Yes, despite some things you may hear, borrowers can find terrific mortgage loans. FHA loans are still available, and you can use down-payment assistance. And now they’re at all-time low, competitive interest rates.
5. Tax break! Don’t forget that you can receive a mortgage interest deduction on your annual tax filing. It can be substantial enough to offset any additional expense of owning (versus renting). So now there’s no excuse!

The main reason to buy a house is because you and your family would like to have a safe, secure, stable home. Another reason is that you can begin owning real estate with an owner-occupied investment, and later on you can buy a larger “move-up” house. So if your property appreciates, that is great, it’s “icing on the cake”, but not the main reason to buy your home.

Now it’s time to get out there and find your dream home.

Standard Pacific Homes, a California based home builder, has sold their lot inventory of 2500 homes to Forest City Land Group business unit and joint venture partner Covington Capital Corporation. Standard Pacific Homes, which has been in the San Antonio market since 2005, builds homes in the $100k to $200K price range. That price point is extemely competive in the San Antonio market, with over 25 builders building in that price range, from Fortune 500 builders like KB Home, Centex, And DR Horton, to local and reigional builders.

Is this a sign that the San Antonio market is following the path to decline of other housing markets? Probably not, as San Antonio is not the only market in which Standard Pacific is selling their home lot inventory. More likely, Standard Pacific is consonsolidating due to problems in other markets and concentrating on their core, more established markets, which San Antonio is not for them.

Indeed, one of the reasons Forest City purchased these lots is due to the attractiveness of the San Antonio real estate market. In their press release,:

“This is an example of our stated strategy of taking advantage of national market conditions to selectively acquire properties and land in key markets. The solid underlying fundamentals of the San Antonio market, including job growth, attractive cost of living and the recreational opportunities provided by the Hill Country area all provide a positive outlook for the single-family market in the long-term,” said Bob Monchein, President of Forest City Land Group.

Seeing a similar pattern of growth, Cassie Gibson of Residential Strategies, Inc., stated, “The outlook for the Greater San Antonio new home market remains positive, despite the overall national housing market and credit market woes.”

What does this all mean if you are looking to buy or sell a home in San Antonio. If you are a new homebuyer, home builders remain focused on reducing their inventory which means that they will continue to provide incentives that should be very attractive to you. If you want to know what they are offering, feel free to contact us and we will let you know.

If you are thinking of selling your home, this is positive news as well. With Forest City having confidence in the San Antonio home market, they believe that there are still buyers to buy. However, it does mean that pricing your home right, maximum marketing exposure, and proper home staging is extremely important. If you are thinking about selling your home, we would be more than happy to consult with you.

The San Antonio housing market remains strong in part to San Antonio’s attractive cost of living compared to other major metro areas. As people continue to move to Texas more than any other state, I believe that our lower cost of living has be to a major factor. So how much less expensive is to live in San Antonio? Well lets take a look at the numbers from Salary.com:

• Austin, TX   -10.1%
• Tampa, FL  -10.4%
• Houston, TX  - 11.0%
• Las Vegas, NV -14.8%
• Phoeniz, AZ -16.2%
• Dallas, TX -19.2%
• Denver, CO -20.1%
• Atlanta, GA - 23.2%
• Philadelphia, PA -28.6%
• Seattle, WA - 29.1%
• San Diego, CA -41.6%
• New York, NY -62.9%

As long as the cost of living in San Antonio remains so attractive, I believe that will cushion San Antonio against any major housing price decline, because San Antonio will remain attractive to employers looking to relocate, retirees looking for a winter home, and investors looking for stable rental properties.

San Antonio does it again. According to a poll by Travel and Leisure, San Antonio was deemed as the most affordable city among the country’s largest metro areas in 2007. San Antonio was also ranked last as far as stylish city goes, but what the heck does that mean?

What else did San Antonio rank high in? Well, we ranked in the top ten for barbecue, historical sites, cheap eats, ethnic food, relaxing and romantic atmosphere, and of course, friendly people.

So when someone asks why move to San Antonio, the answer is simple. Housing is affordable and the market is not crashing, the cost of living is lower than most, we have great food, the world’s best basketball team, and of course, the friendliest people.

We get it. We know what you want in a real estate agent. You want access to homes for sale. You got it. You want information about the market. You got it. You want us to listen to your wants and needs. You got it. You want us to help you buy the right home at the right price. You got it. You want us to sell your home for the best price in the shortest time frame. You got it.

Just tell us. We will listen. We get it.

NuWire Investor, a company that provides news and information about real estate investment, has named San Antonio a Top 10 Cash Flow Property Market.  According to Nuwire:

4. San Antonio, Texas

San Antonio ranked number one on our list of the Top 10 Places to Invest for 2007 and second on our list of the Top 10 Foreclosure Markets for 2007. Home to 1,273,374 people as of 2006, San Antonio retains affordable home prices, with a median of $96,300, in spite of its growing population. Median monthly upkeep is only $374 per month, with an estimated mortgage costing $486.95 per month. The rental vacancy rate for the city is 10.3 percent—on the lower side of this list—and the median gross rent is $678 per month.

Cah flow in it’s simplest definition is the amount of money the property brings in (rent) versus the amount going out (mortgage, taxes, maintaince, etc.). If you have a property that you have thought would make a great investment and here is a great online calculator.

While many parts of the country are suffering from a housing decline, San Antonio remains a “steady wins the race” market.

Forbes has a new feature article in their online Real Estate section comparing million dollar properties worlwide, so I thought it would be neat to compare those homes to a million dollar property in the San Antonio market. As you will see a million dollars buys you much more in San Antonio than elsewhere. I found all these homes using Google search by the way…

Million Dollar in San Francisco…

Million Dollar Home in Chicago…

Million Dollars in San Antonio…

WOW! What a difference…As you can see your housing dollars go a lot further in San Antonio than in other parts of the country. If this is the difference in a million dollar home, imagine the difference in a $100,000 home. Go ahead, kill some of your day and do a Google comparision of homes you can afford and compare other cities to San Antonio.

If your looking for a family friendly restaurant where you and your kids can be yourself but get away from the fast food joints, the San Antonio Express News has a great article and review of many great places. Check it out here.

As the housing market continues to contract, the builders seem to be taking the worst of it. KB Home, one of the country’s largest homebuilders, announced last week that it was shutting down operations in the Rio Grande Valley. According to an article in the Valley’s The Monitor, “Builders and real estate experts blame the decline on the nationwide foreclosure crisis sparked by subprime lending. Amid the subprime problems, lenders are tightening mortgage requirements and loans have gotten more expensive, resulting in lower demand for new homes. ”

So how is the new home market in San Antonio. The answer: still good, just not great anymore. Read this article in the San Antonio Express News, and you will learn that while new home sales were down over 25% in 2007 from 2006, that 2007 was still the 3rd best year for San Antonio homebuilders.

And what did that mean for new home buyers: BIG INCENTIVES. Builders offered to pay buyer’s closing cost’s, free upgrades, and huge discounts. So the question is what is in store for 2008? We have no crystal ball, but all indications are a little more of the same until the market corrects itself. Builders still have excess inventory, which they should be able to bring down by summer.

So if you have been thinking about purchasing a new home in San Antonio, you still have a few months where the builders want to really earn your business with still historically low interest rates.