Bubble Watch

San Antonio ties for most overvalued housing market in the nation

Two Texas cities tie for most overvalued home markets.

Here's a distinction that will likely make homeowners feel pretty uneasy. On its 2016 list of most overvalued housing markets in the country, San Antonio ties with Austin for first place.

Fitch Ratings did a study for Forbes based on its first-quarter 2016 Sustainable Home Price model, which compares home prices in the 50 largest metro areas against the area's economic fundamentals, including unemployment, income, population, and mortgage rates. With all calculations said and done, the two Texas cities are overvalued by 19 percent, the highest in the nation.

The seemingly nonstop addition of jobs and people moving to fill them is what propels the Lone Star State, even though drops in the energy sector have caused slowdowns in other Texas cities. San Antonio and Austin have also quickly rebounded from the recession, with gross metro product rising 18 percent in Austin and 9 percent in San Antonio through the end of 2014.

Home appreciation in San Antonio has gone up 21 percent since home prices bottomed out in January 2012 (current median price: $190,400). Austin has risen 41 percent since July 2011 (the current median price is $278,000). The home growth price in both is outpacing the rest of the local economy.

It's on trend with the rest of the West and Southwest, where the majority of overvaluation is happening, thanks to those areas being able to quickly clear out a backlog of properties since the recession. Phoenix, Las Vegas, and San Francisco round out the top five.

The Northeast is experiencing the opposite problem, with the five most undervalued markets showing up there. New Haven, Connecticut, is the lowest, followed by Detroit; Hartford, Connecticut; Providence, Rhode Island; and Cleveland.

---

Want more great stories like these delivered to your inbox daily? Then sign up for our emails.

rankings forbes

bang for your buck

San Antonio ZIP code is 4th most affordable place for renters in U.S.

Photo by Florian Schmid on Unsplash

undefined

Trying to afford buying a home in San Antonio is difficult enough with current mortgage rates, and doubly so if you're already paying high rent on an apartment or a house. But there are six San Antonio ZIP codes where renters can get the most bang for their buck, according to a new study by financial services company CashNetUSA.

To find the most affordable ZIP codes for renters in the U.S., analysts compared median household incomes by ZIP code to the average annual rent costs in those areas using the Zillow Observed Rent Index. ZIP codes where the average annual rental constituted the lowest percentage of median household income were considered the "most affordable."

San Antonio's 78248 ZIP code specifically stood out as the No. 4 most affordable in the country, and the No. 1 most affordable in Texas. This area encompasses the north San Antonio neighborhoods of Inwood, Forests at Inwood, Oakwood, The Park at Deerfield, Canyon Creek Bluffs, Canyon Creek Village, Blanco Village, Deerfield, Cadillac Drive, and Churchill Estates.

According to the study's findings, the average monthly cost of a rental in 78248 comes out to $1,259.17, and the median annual income of a household in the area is $122,986. Analysts then calculated that the annual rent of a home in this ZIP code only takes up 12.29 percent of a household's median income, which is the fourth-lowest in the nation.

CashNetUSA found the No. 1 most affordable ZIP code for renters nationwide is 66224 in Leawood, Kansas, where annual rent only takes a 10.57 percent cut out of a household's median annual income.

Elsewhere in Texas, two Houston-area ZIP codes – 77401 and 77094 – ranked No. 9 and No. 12 nationally, while Allen's 75013 ZIP code fell two spots behind to claim the No. 14 spot.

The most affordable San Antonio-area ZIP codes for renters
CashNetUSA further unveiled the five most affordable ZIP codes across major U.S. cities, including in San Antonio, Austin, and Houston.

Following 78248 (which took the No. 1 spot citywide) is 78261 (No. 2), which spans east of Highway 281, across Smithson Valley Road. Rent costs in this ZIP code averaged out to $1,698 per month, the report found.

Landing in the No. 3 spot is 78258, which includes Rogers Ranch, The Vineyard, Stone Oak, Summit, Hidden Canyon, and Big Springs neighborhoods. The report said average rent in the area comes out to $1,507 per month, which takes up 17.54 percent of a household's median annual income.

The remaining top two most affordable ZIP codes for San Antonio renters are located in 78259 (Encino Park, Encino Ranch, Cavalo Creek Estates, Northwood Hills, Summit at Bulverde Creek, Roseheart, Redland Woods) and 78260 in Timberwood Park, which is about 25 miles north of downtown San Antonio.

rent rent prices affordable housing