By Katie Burke, Report San Antonio Business Journal
Those in San Antonio’s real estate market know it has been a great cycle these past few years — almost too good, in fact. But while many are holding their breath for any sign of a future downturn, Real Estate Economist Mark Dotzour was more optimistic.Addressing the crowd at Jefferson Bank’s Economic Forecast last month, Dotzour said San Antonio and most of the other large Texas metros are stronger than ever, despite the volatile oil market. And with real estate as one of the strongest, most reliable investment options, he expects prices to continue their uphill climb.
“San Antonio hasn’t missed a beat,” he said, adding that along with Dallas and Austin, the demand for housing is leaps ahead of new development to meet it. “As long as there are no viable alternatives, real estate will stay strong.”So what’s the problem?For starters, Texas’ tax revenues dropped by 6.06 percent between September and December 2015. Taxes collected from both oil production and regulation as well as natural gas production plummeted 48 percent — that isn’t much of a surprise. But sales tax went down by 2 percent, a figure Dotzour said could be a concern if it continues.
On the national level, he said the Federal Reserve System “needs to normalize rates before the next recession. Higher rates mean a stronger dollar.”On the local level, rising home prices aren’t all good news. With the city’s inventory below 6.5 months, Dotzour said it is “way too low” and causing a spike in prices that will result in “an affordability problem that will only hurt us. “Is the stock market going to crash tomorrow? Probably not. Will the home-value bubble burst at a moment’s notice? That would be a no. But most of what Dotzour said can be traced back to the idea that stability is the key to surviving whatever comes next.
And with its reputation as the steadiest of any city in Texas, San Antonio is probably in good shape.