Markets to Watch

San Antonio shines among the top real estate markets to watch in 2023

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San Antonio is the No. 12 market to watch in 2023.

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As we head into 2023, real estate investors and developers should have their sites set on San Antonio.

The Urban Land Institute (ULI)'s annual Emerging Trends in Real Estate report, released October 27, names San Antonio among the top 15 U.S. markets to watch in 2023.

The report, a joint project between ULI and PricewaterhouseCoopers, "provides an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the United States and Canada."

It is based on surveys and interviews with real estate industry professionals.

After an in-depth analysis, the report identifies the top U.S. markets to watch, based on overall real estate prospects. San Antonio ranks No. 12 overall and joins a trio of other Texas hot spots: Dallas-Fort Worth (No. 2), Austin (No. 4), and Houston (No. 14).

A top trend heading into 2023 is the continued "normalization" of markets following the post-COVID boom. Notes the report: "Almost every market in the country received lower ratings for both investment and development prospects this year, illustrating that outlooks are darkening just about everywhere following the brief post-COVID exuberance shown in last year’s survey across a variety of metrics."

However, it continues, "the pandemic seems to have reinforced some trends, notably the dominance of what we called the 'Magnet' markets — many of which are in warmer Sun Belt regions — at the top of the Emerging Trends 'Markets to Watch' standings."

Those "Magnet" markets include San Antonio, Dallas-Fort Worth, Austin, and Houston, among others. The report further categorizes markets into subgroups, with San Antonio, along with Dallas and Houston, falling into the "Super Sun Belt" group.

"These markets are large and diverse but still affordable, forming powerhouse economies that attract a wide range of businesses. Despite their large population bases, most are among the fastest-growing markets in the United States. Moreover, their economic performance has been solid through thick and thin," the report states.

"Though every market lost jobs during the pandemic recession, recovery has been much quicker and more complete in the Super Sun Belt markets. These metro areas collectively have the highest average rating of any subgroup, as it did last year."

Austin, meanwhile, is classified as a real estate "Supernova," defined as a smaller metro area (1 to 2 million residents) that has "exploded into prominence over the past decade or so."

According to the report, Austin has the highest investor demand of any market, while Dallas tops the list for development/redevelopment opportunities. San Antonio ranks first in the nation for homebuilding prospects, the report says.

bang for your buck

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

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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.

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