Sales of Existing Homes In San Antonio Have Slowed

From the San Antonio Express News' Jennifer Hiller comes:

San Antonio home sellers and real estate agents aren't quite singing the summertime blues, but sales of existing homes slowed considerably in July.  The number of home sales dropped 25 percent in July when compared with the same month in 2009, dipping to 1,491, according to data released Tuesday by the San Antonio Board of Realtors. 

The likely culprit of the unseasonable doldrums: the federal government's $8,000 carrot offered to first-time home buyers and $6,500 to some current homeowners, which was available to those who could go under contract by the end of April.  The tax credits boosted the number of home sales in the springtime, but most of those deals had closed by the time July rolled around.  “What we saw in the spring market was a surge in sales for the tax credit,” said Marietta Alba, SABOR chairwoman. 



But sales volume is still up 6 percent for the year, with 10,922 sales so far compared with 10,297 by the same time in 2009.  The expiring federal tax credits are also a likely reason the median sales price rose slightly, to $160,800.  Alba said that July saw an unusually high number of sales of homes above $500,000 — a group of buyers unlikely to be swayed by the federal tax credit — and a lower number of sales below the $200,000 mark most popular with first-time buyers. 


Earlier in the year, the number of first-time buyers in the market helped push the median price down slightly.  As the market moves out of its traditional peak season, Alba said SABOR expects the rest of the year to be steady, if unspectacular. 


“Our interest rates are still remarkably low and we're glad about that. Job growth continues,” Alba said. “We're still a steady and stable market.”  Homes sold slightly faster in July than they did in 2009, in an average of 84 days, which was 11 fewer than last year. And there were 1,430 pending sales at the end of July. 

Real estate agents and home builders both have noticed a drop-off in business from the usual summer frenzy. Most home buyers try to close a deal and move before the school year starts.  “I think we saw an increase until the month of May. In June we saw a drop,” said Richard Zepeda, an agent with Keller Williams Heritage.  Now Zepeda said he has noticed that builders again are offering good incentives to buyers and larger-than-usual agent commissions, as high as 7 percent, to spur interest. 
“The interest rates are so historically low,” Zepeda said. “It's the best time to buy if you can, especially while other people are still sitting on the fence.” 

Home Sales are Increasing in San Antonio; Prices are Not

The May real estate numbers are in for San Antonio, and the number of sales of existing homes in May increased 19 percent to 1,928 sales compared with the same month in 2009, according to a new report from the San Antonio Board of Realtors.  But the median price of a San Antonio home dipped 4 percent to $145,900 compared with May 2009.

The increase in the number of sales this May has been credited to the tax incentives for homebuyers that ended April 30th. 

A report this week based on the Fiserv Case-Shiller Indexes said San Antonio home prices could slide slightly this year, but only by 0.5 percent. Nationally, a 3.1 percent decline is expected this year, with steep home price declines continuing in hard-hit markets such as Nevada, Arizona and Florida.  Once again, San Antonio is one of the more stable real estate markets in the country.

With around 7.8 months of inventory — meaning that if no more homes came onto the market, it would take 7.8 months, in theory, to sell the entire inventory at the current pace — the market remains tipped slightly in favor of buyers. About 6.5 months of inventory is considered a market balanced between buyers and sellers. 

The other good news?  The average number of days on the market for a San Antonio home that sold in May was 83, a quicker pace than the year before.

So What Happens When the Real Estate Tax Incentives End?

So what happens to the real estate market in San Antonio when the tax incentives end in a few days?  The $8,000 tax credit for first time homebuyers and $6500 for repeat homebuyers ends this Friday, April 30th.  Buyers who qualify for that incentive have to be under contract by that date and close the deal by June 30th to get the credit.

Ahh, but for San Antonio, there is an "escape clause".  San Antonio may benefit from an IRS provision that gives active-duty military members an extra year to buy a house and take the tax credits if they have been deployed for at least 90 days between Dec. 31, 2008, and May 1 of this year.  So with our large military bases here, we may see the market continue to be fueled by returning military buyers for the next year.  Time will tell.