Housing Trends: Insights for Small Business Community
The housing market is in a state of flux, with recent trends indicating notable shifts that small business owners in San Antonio should be aware of. As we approach the end of 2024, understanding these trends can provide valuable insights for strategic planning and growth.
Current Housing Market Trends
Home prices have seen varying patterns across different regions, influenced by a mix of economic factors. Nationally, home prices have moderated compared to the rapid increases of previous years, reflecting a balance between supply and demand. However, specific areas, including certain parts of Texas, continue to experience price fluctuations driven by local economic conditions and demographic shifts.
The housing market in San Antonio has shown resilience, but it is not immune to broader economic influences. Factors such as interest rates, inflation, and employment trends play crucial roles in shaping the local market. As reported by Bankrate, the national housing market is characterized by slowing price growth, increased inventory, and changing buyer preferences (Federal Reserve Bank of Dallas).
High mortgage rates have contributed to a decline in home sales and a cooling of home prices in many markets. The number of mortgages with delinquencies of six months or more fell to 2008 levels, with approximately 100,000 borrowers six months or more past due on their mortgages. Despite this, the share of mortgages in foreclosure fell to 0.2%, the lowest since early 2022, indicating many late-stage delinquencies were resolved without foreclosure.
The share of adjustable-rate mortgages (ARMs) in originations rose to 15.5% in May 2024, the highest of the year, driven by rising mortgage rates. Despite the increase, ARMs still make up a small portion of total outstanding mortgages, at 5%, down from their peak of 20% during the Great Financial Crisis.
Impact on San Antonio’s Small Businesses
For small businesses in San Antonio, particularly those in real estate, construction, and home-related services, these housing trends present both challenges and opportunities. Sales of newly built homes are down 17% year-over-year through the first six months of 2024, with nearly all markets seeing declines. Of the top 30 U.S. metros, only Portland, Oregon, and Las Vegas showed increases in newly built home sales (Federal Reserve Bank of Dallas).
The decline in sales impacts businesses that rely on home transactions, such as real estate agents, mortgage brokers, and home improvement contractors. Conversely, the cooling market might offer opportunities for first-time buyers and investors looking for lower-priced properties.
Despite the rise in supply, the statewide median home price showed nearly flat growth, rising 0.6% year over year to $345,000. Sales were down 3% compared to Q2 2023, falling to 93,417.
“Interest rates are a big part of the story,” Texas Realtors Chairman Jef Conn said in a statement. “With today’s higher rates, some buyers are sitting on the sidelines and hoping rates or home prices come down.”
This trend varies in the major metro areas of Texas. In Dallas, active listings were up 44.7%, pushing the months of supply to 3.8. Houston inventory was up 42.5%, and months of supply grew to 4.2. San Antonio listings jumped 43.4%, bringing the months of supply to 5.2.
Strategic Responses
Diversify Offerings: Expanding product or service lines can help mitigate risks associated with market slowdowns. For example, real estate businesses might explore property management or rental services as additional revenue streams.
Focus on Customer Experience: Enhancing customer service can differentiate businesses in a competitive market. Personalized services and strong client relationships can lead to repeat business and referrals.
Leverage Technology: Utilizing digital tools for marketing, customer engagement, and operations can improve efficiency and reach a broader audience. Online platforms and social media can be powerful tools for small businesses to connect with potential clients.
Monitor Economic Indicators: Staying informed about economic trends and housing market forecasts can help businesses anticipate changes and adapt strategies accordingly. Regularly reviewing reports and market analyses is crucial for proactive planning.
Supporting Resources
At Emerge and Rise, we offer a range of programs designed to support small businesses through economic changes. Our Financial Coaching Program provides personalized advice and tools to help businesses manage their finances effectively. The ThriveXcelerator Program focuses on strategic growth, helping businesses scale sustainably even in fluctuating markets.
Final Thoughts
The housing market's current trends underscore the importance of adaptability and proactive management for small businesses in San Antonio. By staying informed and leveraging available resources, businesses can navigate challenges and capitalize on opportunities to ensure long-term success.
For expert guidance and tailored support, connect with Emerge and Rise™. Our programs are designed to empower San Antonio’s small businesses, providing the tools and resources needed to thrive in any economic climate. Contact us today to learn more about how we can support your business.
Stay ahead in a changing market. Contact Emerge and Rise™ for tailored programs that empower your small business to thrive amidst economic fluctuations.
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