The largest gap in days on the market is in the 78154 ZIP code, with 12 average days on the market in April 2022 and 77 days in April 2024, according to data from the San Antonio Board of Realtors.
Changes in the market have prevented some potential buyers from showing interest in properties, while sellers compromise on initial prices, realtor Brian Mylar said.
“Back in 2021, you put a house on the market and would have an offer immediately,” Mylar said. “It is a complete turnaround today, and a lot of buyers are concerned about interest rates.”
What you need to know
The market for single-family homes in the north San Antonio area—and across much of the city—is showing flexibility for some buyers, as homes stay on the market for three to four months on average in 2024, and sellers are once again offering a few concessions to buyers, said Chelsea Roberts, the 2024 president of the Four Rivers Association of Realtors.
But several factors, including high interest rates and inflation, are keeping prices high. Months of inventory on the market—an indicator determined by counting the number of active listings and pending sales in a market, according to the National Association of Realtors—would traditionally indicate a more “balanced” market, but price inflation and interest rates are curbing some activity as potential buyers wait it out, Roberts said. According to the NAR, if inventory is rising there is usually less pressure for prices to increase.
“In 2020-2021, people would pay $10,000 over the asking price. In 2023 and now in 2024 we're seeing that it's more negotiable. People are able to put in at times lower offers than asking,” Roberts said. “But there's not as many buyers. We're not yet in a buyer's market.”
Keith Campbell, a realtor with LPT Realty Group, said interest rates have reduced the amount of house people can buy, leading buyers to be more educated and patient when purchasing a home. Compared to 2021 and 2022, sellers are having to do more to market to buyers.
“Buyers are a whole lot more patient now,” Campbell said. “Houses aren’t flying off the market. Your house has to look good, smell good, show right, and it has to be priced right.”
How we got here
Jose Trinidad, a finance and economics professor at Texas State University, said looking to the baby boomer generation is one example of how the elevated interest rates and home prices change behavior in the market. Many baby boomer homeowners attained gains in their home values, but they cannot opt to size down due to higher prices compounded with higher interest rates, he said.
Interest rates are currently around 7%, but the market still hasn’t slowed down for buyers.
Campbell said buyers are seeing more houses before committing to a purchase, due to rising interest rates and changes in the market. Buyers are more interested in the cost of ownership, the maintenance costs associated with a home and the longevity of investments, he said. “In 2023, we might have shown around 20 houses before the buyer made an offer,” Campbell said. “We are easily showing double or triple that now. It could be 50 to 60 houses before they make a move.”
With the changes in interest rate, Campbell said his recommendation is for buyers to go for homes they can afford payments on, and if interest rates decrease, potentially refinance the loan on the home.
“If rates go down, you can refinance, but if they continue to go up, you will be happy you got a home when you did,” he said.
Put in Perspective
The state of the housing market relates to factors dating back nearly 20 years, Trinidad said.
“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.”
Out of the 1,424 homes sold in the San Antonio area last month, 841 were sold under the asking price, and 373 were sold at the asking price, said Erica Gillen Quintero with EXP Realty.
The bottom line
Trinidad and Roberts said they expect at least a quarter of a percent of the Federal Reserve interest rate to be cut this year but do not expect much more than that to alleviate market pressures heading into 2025.
As people continue to move in and out of the area, home prices and days on the market will continue to fluctuate.
Homeowner Isaac Hernandez said for people looking to move, selling a home has become more competitive than in previous years. “I’ve been trying to sell my home for about two and a half months,” Hernandez said. “There are three other houses for sale in this neighborhood alone. I think homeownership can be scary for people right now with the way prices are, and people are more cautious about the homes they buy.”
Contributions by Thalia Guzman & Jarrett Whitener
