San Antonio’s condo market is starting to crack as condo markets in other Texas metros heat up.
Listings in Alamo City piled up in recent months as buyers retreated, forcing sellers to slash prices and offer perks to move units, according to a new Redfin report. There are 585 active condo listings in the city and just 120 buyers in the hunt, creating a roughly 4-to-1 seller-to-buyer imbalance, the San Antonio Business Journal reported.
Months’ supply of condos sits around six — the upper edge of what the San Antonio Board of Realtors considers a balanced market. That’s causing many units to linger while sellers struggle to recalibrate.
Texas cities have already been slower than peers around the country to embrace high-rise living, but the product type is even less popular in San Antonio. A sizable military population favors single-family homes or short-term rentals that can be offloaded easily, leaving condos sidelined, the outlet reported.
Meanwhile, new construction has swelled supply by about 20 percent, adding lower-priced single-family alternatives to the mix, leaving buyers overwhelmed by local options, Local Redfin agent Jesse Landin told the outlet.
The local slowdown mirrors a national pattern.
Redfin found that in August, there were 72 percent more condo sellers than buyers across the U.S.— the fifth straight month of oversupply. Rising costs are largely to blame. Homeowners association fees now eat up as much as a quarter of a typical buyer’s monthly budget, while insurance premiums and special assessments for maintenance have climbed sharply since 2020.
Those costs can kill deals. Landin cited a $250,000 condo that lost three contracts because its $1,000 monthly HOA fee drove total monthly costs near $3,000 for a 1,000-square-foot unit. Cancellation of San Antonio home purchases overall has trended higher than the national average recently.
About 10 percent of single-family and condo listings in San Antonio risk selling at a loss, Redfin found, which is above the national average. Investors have pulled back, with some resorting to converting units to short-term rentals just to stay afloat.
Buyers hold the upper hand, currently. Sellers are starting to cover HOA fees or closing costs to sweeten deals, particularly around the Medical Center area, Landin said.
Meanwhile, residents of other Texas metros have been flocking to luxury condo properties popping up in the Texas Triangle.
In Houston, developer Satya recently expanded its St. Regis condo tower due to strong demand. Nearly 40 percent of the 90 units were reserved before construction started on the project. The now 38-story tower is set to rise at 102 Asbury Street between Memorial Drive and Buffalo Bayou.
In addition, the first standalone Ritz-Carlton condo tower in Texas is rising in the Woodlands. And, Randall Davis Company’s London House in River Oaks pre-sold all but two of its 23 units at 2323 San Felipe Drive, reinforcing demand for vertical luxury living in the metro.
— Eric Weilbacher
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