Posted by Randy Kelley on December 20, 2008
San Antonio’s realty market has started to share some of the nation’s economic downturn discomfort. The following San Antonio Express News article tells the tale.
Before reading the article, keep this in mind. In balance, there’s good news in the bad. First, when compared to the impact on the nation’s other large city realty markets, the recession’s impact on San Antonio is disproportionately low. Second, well prepared San Antonio area homes are selling well. Third, for financially capable buyers, the market affords the best opportunity in years to acquire exceptionally good property for a reasonable price at exceptionally good interest rates. Here’s the article:
San Antonio Express News, 12/18/08
"The U.S. still may consider the San Antonio housing market “the benchmark” of the national housing industry, but it’s a pretty low bar these days.
Median home prices dropped 4 percent to $142,000 from $147,400 in November 2007, according to data released this week from the San Antonio Board of Realtors. It was the biggest drop in median homes prices in nearly eight years and removed a key buffer against foreclosures. Sales of existing single-family homes plummeted 32 percent to 1,034 in November compared to 1,526 in November 2007 — the worst decline since January.
And filings for the Jan. 6 Bexar County foreclosure auction jumped 45.6 percent to 1,085 from January 2008, the fourth time in 12 months the increase in postings has exceeded 40 percent, and the single highest number of auction filings for one month since at least 2000, according to RexReport.com. Had it not been for Fannie Mae and Freddie Mac suspending their single-family foreclosures and evictions as of November, the foreclosures could have been higher.
The sharp drop in November’s housing numbers stands in sharp contrast to the national perspective on San Antonio.
Late last month, the Mortgage Bankers Association hailed San Antonio as “the benchmark for the rest of the country in lending and building.” In May, Forbes magazine named the Alamo City one of the top places to ride out a recession, and in October it picked San Antonio as a top place to invest in real estate.
But the slowdown has been in the works for a while. All year, the monthly number of existing-home sales has been down compared to 2007, and for the last few months, the median price has been statistically flat.
Then came November.
Local industry experts said that, basically, the slowdown means the San Antonio market no longer is able to insulate itself from the national crisis. Home sales normally decline in November, but this year’s decline was much larger than expected. “In a November to November comparison, to be down 32 percent is pretty significant,” said Bob Leonard, outgoing chairman of the San Antonio Board of Realtors and agent at Re/Max Associates 2000.
For Pamela Callies, owner and broker of New Home Realty, the November numbers only confirm the massive slowdown she and her team have felt. Callies said her real estate agents have closed just two deals since September. “With every deal, right before the closing, the banks are finding reasons not to approve these people,” she said. “On others, they are re-running the credit and underwriters are saying no.” One of Callies’ clients was denied because the underwriter refused to accept a divorce decree showing the buyer no longer was liable for a debt her ex-husband had left unpaid. In past years, the decree would have been sufficient.
The number of home shoppers is down to a trickle as well, she said. “My listings are not getting any showings at all. (Normally, business) slows down, but it doesn’t stop,” Callies said. “It has really stopped for me.”
Some mortgage brokers have had to rely on refinance activity to make up for the drop in home sales. “November and December are not especially slow for me,” said mortgage consultant Helen Bernatek of Town and Country Mortgages Services. “But November was certainly lighter on the purchase side than December. It’s a good thing people are usually thinking about refinancing before they go into the new year.”
Bernatek attributed the November softness to the uncertainty of the presidential campaign season. “I think people were sort of taking a pause with the political environment.”
The San Antonio slowdown reflects state and national trends. Last month, the 13-county Dallas region saw a 33 percent drop in existing homes sales and 7 percent drop in its median price.
Similarly, Houston had a 32 percent drop in sales and 8 percent drop in median price, according to Jim Gaines, research economist at Texas A&M University’s Real Estate Center.
New forecasts signal the declines will continue into 2009. The most recent National Association of Realtors’ Pending Home Sales Index, which is based on contracts signed in October, dipped 1 percent from last October. A sale usually takes 45 to 60 days to complete.
Local housing experts attributed the San Antonio slowdown to decreased loan access among large national mortgage companies and consumer uncertainty about which way the economy is going. “A lot of money used in the bailout has not trickled down enough to the consumer,” said Travis Kessler, SABOR’s chief executive officer. “Part of what we are looking at is there is a lot of pent-up demand. They are watching the national news and wondering if interest rates will come down after the new administration comes in. This wait-and-see position is having an impact.”
Home sales also have lagged because transplants are finding it difficult to sell their existing homes in other states. Lenders increasingly are requiring that home buyers have sold their existing homes before approving a new mortgage. As a result, San Antonio home sales have contracted much more than they would have in a normal recessionary period, Gaines said.
“In the state, we didn’t have a price bubble, but we had a transaction bubble. For about three years, it’s really jumped up, and then for the last year it’s come down to correct. But it’s over-correcting down below the long-term trend based on the 12-month moving average."
Article by Aissatou Sidime’, San Antonio Express News, 12/18/2008
Republished by:
Randall R. (Randy) Kelley
MS, BS, PA
San Antonio Realtor®
Internet Realty Services Advisor and Buyer Agency Specialist
sanantoniohomequest.com
Keller Williams Legacy
(210) 863-2661 or 867-8743 or (800) 201-9145
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