Is the Real Estate “Sugar Rush” over?

By: Kaitie Moore Underwood | REALTOR®, Blue Collar Commercial Group

Experts say the real estate market in the greater San Antonio and Hill Country area is normalizing after a “sugar rush” of previous years. We’ve shifted from the norm of multiple offers over-asking in late 2021/early 2022 to what many consider to be a more palatable pace. Despite the COVID-19 pandemic causing a significant economic downturn, our area’s real estate market remained relatively stable. There are still challenges that the market will face, however experts predict a strong 2023, particularly for commercial real estate.

The industrial sector is poised for growth, driven by a strong demand for e-commerce and logistics. The San Antonio area has seen an influx of distribution centers and warehouses due to its location, affordable real estate prices, and business-friendly climate. These factors make it an attractive option for businesses looking to establish a foothold in Texas.

Similarly, the office market is expected to experience growth, with an emphasis on collaborative workspaces and flexible leases. Developers are focusing on creating modern, tech-enabled offices that cater to the needs of businesses and their employees.

While the retail market has struggled in recent years, experts predict a shift towards experiential retail, with a greater focus on entertainment and dining experiences. This trend is already evident in San Antonio and areas of the Hill Country, with the opening of new mixed-use developments that combine retail, dining, and entertainment options.

Despite these positive outlooks, challenges remain in San Antonio’s real estate market. One of the biggest challenges is affordability, particularly in the housing market. San Antonio’s housing prices have been steadily increasing, making it difficult for first-time homebuyers to enter the market. However, developers are beginning to focus on building more affordable housing options to meet this demand.

Another challenge is the shortage of skilled workers in the construction industry. The COVID-19 pandemic caused a disruption in the supply chain, resulting in material shortages and delays in construction projects. To address this challenge, developers are investing in training programs and incentives to attract and retain skilled workers.

Investors looking to enter the greater San Antonio area’s real estate market should consider investing in commercial properties, particularly in the industrial and office sectors. The demand for e-commerce and logistics is expected to remain high, while the office market will continue to shift towards collaborative workspaces and flexible leases.

The multifamily sector is another attractive option for investors, with a growing demand for affordable housing. However, investors should be mindful of the oversupply in the luxury apartment market, which has resulted in declining rents.

Overall, the San Antonio area’s real estate market is expected to remain stable and strong in the coming years, with growth opportunities in the industrial, office, and multifamily sectors. However, investors should be mindful of the challenges in the market, such as affordability and the shortage of skilled workers, and focus on investing in properties with strong fundamentals and a favorable location.

A strong realtor can assist with that aim. I would love to be a resource, so please call today!

Kindly,

Kaitie Moore Underwood

REALTOR®, Residential & Commercial

737-203-4178

[email protected]

Bluecollarcommercialgroup.com

(Sources: https://www.capitalanalyticsassociates.com/while-challenges-remain-san-antonios-real-estate-market-is-eyeing-a-strong-2023/ https://sanantonioreport.org/san-antonio-real-estate-market-2023-outlook/ https://www.homecity.com/blog/real-estate-investing-san-antonio/)