Texas COVID concerns

[MJ Roman]

Hello! Newbie investor right here! My brother and I were looking at the San Antonio TX area for our first rental purchase but do have concerns about the pandemic especially with the current news about the COVID spike in TX. What are your thoughts about investing in TX — is it a good/bad idea? Should we look at other areas? Thanks!

[Christopher Campbell]

The market here in San Antonio hasn't too dramatic of a shift to scare people out. Do you live in Texas or somewhere else? If you're a newbie and starting your investing career off buying in potentially foreign areas you'll want to be extra careful. Be sure to connect with as many local pros as you can and network a ton to build a solid team. 

Just running some a basic analysis on the Bexar County (The dominant county for San Antonio) market from the beginning of April to the end of June this year vs the same timeframe last year there's been a few notable changes.

Total home sales saw a reduction of about 9.6%. Where 7282 homes sold in that time frame last year, 6596 homes sold in that timeframe this year. For a 3 month stretch, near 10% reduction in home sales may seem big but ultimately I think can be expected along with a slight increase in average days on market given the current circumstances. There's also been a decline in New Listings since near the beginning of the year and Total Homes For Sale here recently that can be contributing to this. 

Despite this, the average sold price of homes in San Antonio in that timeframe this year saw an increase of 3.5% over last year mirroring the stability this market can bring from that standpoint. This was achieved with about the same SP:LP ratios across the different bed counts. I think you can expect on an average basis that the city will produce a stable and consistent valuation increase over time for your investments with a lot less volatility relative to other markets. I work with a lot of local and out of state investors that are looking to capitalize here in San Antonio due to this factor as well as lower costs of entry, clear supply/demand gap in favor of the investor, annual resident increases, and relatively low crime rates vs other major cities among many other reasons I find San Antonio to be a great place to live and invest. (Have you tried the food?)

The setback the market is currently seeing is setting the stage for a solid comeback. The San Antonio market is resilient and presents great opportunities to novice and experienced investors. Texas as a whole is a great state for Real Estate.