Whether relocating from in town or from out of state, buyers are often surprised to find out just how strong and competitive the San Antonio housing market is. Maybe it’s because they have been watching too many HGTV real estate rehab shows that they think there are a ton of great listings out there, or maybe it’s because of the frequency with which national news outlets have reported on weaker real estate markets from around the country. Whatever the case may be, buying a great property in San Antonio isn’t as effortless a task as buyers seem to think.
Why is this the case? Well, in a word – inventory. According a San Antonio Board of Realtors’ February 2014 market report, we had just 4.1 months of inventory available in January of this year. That number probably doesn’t mean much to the average buyer, but to the real estate professional (realtors) that’s a pretty significant statistic given that anything under 6 months of inventory is considered a sellers’ market. The demand is strong, but the supply is not.
Another San Antonio trend helping to further the current seller’s market, is the disconnect between buyer and seller expectations. Generally speaking, San Antonio property owners tend to leave remodeling or updating their properties to the next guy. Their reasoning is ‘why should I risk putting more money into updating the place, when a buyer can remodel it to suite their own tastes.’ On the surface, that seems like a fairly reasonable idea. However, it’s not such great reasoning when you take into consideration the large number of buyers in San Antonio using FHA loans. Don’t get me wrong, FHA loans are great, they have enabled many people to buy homes who would have otherwise not been able to do so. However, if a buyer is using an FHA loan, 9 times out 10, it means they don’t have a lot of money for a down payment, and this means a large proportion of a property’s potential buyers cannot afford to buy a property and then remodel or update it afterwards.
So what’s a buyer to do? Well, as you prepare yourself to make offers on properties realize that the competition isn’t really between you and the seller, they have the upper hand at the moment. The competition is between you and other buyers. When inventory is low and the number of rehabbed or updated properties even lower, it’s not uncommon for the best looking properties to go under contract their first day on the market. So, buyers beware: if you want to compete with sellers, be prepared to lose; if you want to win, expect to move fast and be prepared to face your real competition – other buyers.