Recession, San Antonio, and Real Estate
Recently Forbes magazine named San Antonio Number 2 in the list of recession-proof cities, right behind Oklahoma City. The reasons for this, as cited by Forbes, is strong employment, affordable houses, and a good number of business coming to town. All of the above are correct! San Antonio does have strong employment with the number of unemployed hovering around 4.5%, which many think is basically full employment as some choose not to work. Housing is affordable with the average home price staying around $185,000 even after the nation wide real estate boom that caused prices to sky rocket in other parts of the country. And lastly, many business are coming to San Antonio with more than 20,000 new jobs slated to come to town in the near future. As a local San Antonio Realtor let me talk about each point from the perspective of someone living and working in San Antonio.
LOW UNEMPLOYMENT - In the past there were a good number of available jobs in San Antonio, but most of the jobs were low income positions primarily fueled by the tourism industry. Theses jobs included restaurant workers, hotel workers, and jobs working at theme parks. Great jobs to have and a sign that our tourism industry was strong, but many other cities in Texas look unfavorably on San Antonio because there weren’t the higher paying, more prestigious jobs that other cities like Dallas, Austin, and Houston were well known for having. Today San Antonio is a city that is thriving! The tourism industry is strong and the jobs that were in San Antonio mentioned above are still available, but there are jobs from other sectors that are bringing higher paying jobs to town! Jobs in the medical, bio-medical, and technology sectors are flourishing. BRAC (or Base Realignment and Closure) has brought a large number of jobs to San Antonio, and has made San Antonio the premiere city for military medical training in the nation. The median income of the city is also on the rise because of these jobs. Other jobs coming to town include jobs at the new Toyota plant and fringe jobs as suppliers and other companies work to keep the Toyota plant supplied with everything they need. The New AT&T which merged Soutwestern Communications, AT&T Corp, and Bell South, Tesoro, Rack Space, and Valero are all companies that are contributing to the growth of the city.
AFFORDABLE HOUSING-Many markets in the United States saw home prices rise like never before. The discrepancy between income and home prices grew to a point that “tricky” and “unconventional” loans were put in place to help people get into homes that seemed to be a great investment because a home bought today could be sold in a few months at a great profit. We all know what happened as a result. The sub-prime loans went away and home prices are now dropping in many of these areas (there is more to the story, but for the sake of time I obviously condensed it). Why did this not happened to San Antonio? Well, it did to some extent. The reason you don’t hear about San Antonio as much is because prices did not rise like they did in other places. That happened because of the amount of land we have in Texas. Here is how it happened: In many places when homes were being snatched up at sweat breaking pace prices had no option but to go up because many of these places are land-locked. Texas, for the most part, is not. So you don’t see prices sky rocket, you see the number of construction starts sky rocket. What I mean by “construction starts” is the number of permits pulled to start construction on new homes. We have land in Texas (ever see an old Western movie). When that is the case all builders have to do is go out another couple miles and start a new neighborhood, and that is exactly what builders did. They kept going out further and further. This lead to excess inventory that the builders couldn’t sell. They had to offer bigger and bigger discounts to sell that inventory so many great deals were had. The bad thing is that there is still inventory, but the good news is a lot of it has been sold off. Builders are still struggling, but many are seeing some light at the end of the tunnel. Pre-owned homes are slower to sell as well. The reason is because of the builders. As they drop the prices and cut into profits that were pretty nice at one point sellers of pre-owned homes cannot compete. They just don’t have the profit margins the builders do. The good thing is that San Antonio is in better shape than most. Because of the reason mentioned above people can still afford homes here! As long as that is the case San Antonio will remain in better shape than other places.
OTHER REASONS-I think there are other reasons San Antonio is seen as “recession proof”. The main reason is that San Antonio is a great place to live! The weather is great, and the people who live here are awesome! People from other states are realizing that they can move to San Antonio and keep the standard of living they are accustomed to without having to shovel snow! All the great restaurants are in San Antonio. All the great shopping people like is in San Antonio. You can come to San Antonio and enjoy life without having to over-mortgage yourself to do so. I have a good friend that moved here because they want to start a family, and they want his wife to stay home with the kids. They could not do that in California. In San Antonio they can! That is the reason San Antonio is recession-proof!
If you want to make the move to San Antonio, I’d love to help! Call me or visit my website:
Chris Cowley
210-389-6006
