The Federal Reserve Bank of Dallas released their Economic Indicators report for San Antonio September 22, 2016. The report, however positive for economic growth, did show a downshift in job growth and an increase in unemployment during the summer indicating that this year will be weaker compared to last year for San Antonio. This is not unlike the Austin Economic Indicators report which also showed a small increase in the unemployment rate. Both cities are thriving and growing and continue to see economic growth, but not at the heightened levels of the last several years. The details of the San Antonio report show what this could mean for the real estate market in this area.
Unemployment went up to 4.0 percent in August from 3.7 in July. Comparatively the U.S. unemployment rate held at 4.9 percent, and Texas moved up to 4.7 percent. San Antonio’s hike in unemployment is a direct result of their growth in the labor force which rose by 8.5 percent.
This increase in the labor force is great news for the housing market, especially when looking at the reasonable median home price of $199,830 in July. The median home price has held steady since March in San Antonio.
We continue to be in a great buyer’s market, especially given the historically low interest rates with some of the lowest interest rates in the last 35 years. The chart below shows the long term trend in ever lower interest rates. Source: Federal Reserve St. Louis
Looking at the employment growth by sector in San Antonio, construction grew by 5.3% to a 13.7, and other services grew to 10.1, mostly attributed to auto repair services due to the spring hail storms. Professional and business services hiring also grew to 3.6. And, government held to their five-year average of 1%.
According to the report, this strong growth in construction employment and permits for new single-family home construction, suggest that the San Antonio residential real estate market remains healthy. This is great news for all of us here in Texas and in real estate.