San Antonio Express-News (Sunday)
With more homes on market, prices slip
Prices of new homes in Texas have cooled in recent months, a report by HomesUSA indicates.
The change comes amid a slump in the market prompted by higher mortgage rates and the preceding rise in prices. As a result, builders are offering more incentives to buyers and real estate agents to boost sales as inventory increases and new houses take longer to sell.
HomesUSA, a Dallas-based real estate firm, evaluates multiple listing service data and three-month moving averages for sales, prices, active listings and other figures.
Its November report indicates that in the past three months, the average selling price for a new home in San Antonio was $388,183.
That was down from $390,159 in October and $400,473 in September. This past year, the three-month moving average peaked in July at $407,028.
“That’s not a big drop,” said Ben Caballero, a real estate agent and CEO of HomesUSA. com. “But I bet if you knew exactly what builders are paying (for) commissions and incentives, it would be a larger drop.”
Prices in Austin, Dallas-Fort
Worth and Houston have also been on the decline in recent months.
Although prices in those markets — except Austin — are higher than a year ago, all have declined since the summer, according to HomesUSA.
The average rate for a 30year, fixed-rate mortgage was 6.48 percent during the week ended Jan. 5, according to Freddie Mac. That’s up from 6.42 percent a week earlier and 3.22 percent a year earlier.
“Mortgage application activity sunk to a quarter-century low this week as high mortgage rates continue to weaken the housing market,” Sam Khater, Freddie Mac’s chief economist, said Jan. 5.
To attract buyers, builders are offering mortgage buydowns, and money for repairs and upgrades. They are also providing bonuses to agents in addition to their standard 3 percent commissions.
“Builders have been able to delay some of the effects of the high interest rates and the slowdown by offering incentives,” Caballero said.
New homes in San Antonio are spending more time on the market — about 65 days on average as of November, compared to 49 days a year prior — as inventory expands.
There are 4,182 active listings on average, an increase of 106.4 percent from a year earlier. Listings have risen 43.8 percent in Houston, 174.9 percent in Dallas-Fort Worth and
118 percent in Austin.
While the three-month moving average for sales has risen in recent months, there’s a caveat, Caballero said.
The average rose to 575 sales in November, essentially flat from 574 in October, and up from 510 in September, according to HomesUSA.
But those numbers don’t paint a full picture, Caballero said, because builders were selling homes so quickly in 2021 that they were not entering all listings in the MLS.
Spring 2020 to spring 2022 “was the hottest, most aggressive demand for homes that I’ve ever seen,” he said.
The market often cools in the fall and winter, but Caballero said the trends are “counter-seasonal.”
“We know new home sales are seasonal and the San Antonio new home market is returning to normal. But the trends we see overall tells us the local slowing in new home sales appear to be more than just a seasonal blip,” Caballero said.
As the market slows, builders are curbing construction.
Housing starts nationally were down 16.4 percent in November compared with a year earlier, according to U.S. Census Bureau data.
“They’re not as aggressive in their starts,” Caballero said of builders. “What you’re seeing now are homes that were started at a time when the market was different. You’re seeing the effects of people that went under contract and saw the interest rates go up and had to cancel.”