We have been receiving a lot of inquiries recently from clients we manage for asking how the market is doing in Bexar County and Texas overall. They are concerned as there are rumors and nation wide indicators of a market slow down in real estate. Those concerns are understandable but need to be put in context.

Owning a piece of real estate for investment of even your home is a little bit like owning stock. The value could move up or down and sometimes you will have minimal control on which direction it will take. However, when you plan for the long term, you will find that real estate is a solid investment.

First, Texas and Bexar County do no follow the trends of the East and West Coasts. We don’t experience 10-15% appreciation rates year over year and then swing south when the market drops. What has happened in Bexar County is when the market slows, our market simply levels out. Why? On average, our appreciation rate remains at 2-2.5% annually for market appreciation.

Given that we don’t have wild market swings up, we don’t see the market slide back fast either. When the market slowed in 2008 through 2011, property values did not necessarily always go backwards but what we saw were people over leveraged on homes with 103-107% financing and had no equity. No matter market conditions are, not having an equity position is always risky.

Now Second, like Dave Ramsey would say, invest in what you understand and know. If you can’t understand it, don’t do it. We work with a lot of investors to purchase properties in areas that are consistent performers. Our office understands what it takes to manage and rent properties in Northwest San Antonio and Bexar County and that is what we stick with. We know the markets for resale, rents and long term investment strategy. If you always focus on buying in a solid area, attaining an equity position when you purchase and positive cash flow, you will do well.

So to recap, when asked if the market is changing, my answer is that it could be slowing down but that does not mean that real estate would not be a strong investment. By focusing on the areas we know and sticking to our basic three criteria for investing, it’s hard to find a time when it is not a good time to invest.

If you have an interest in property management or investing in San Antonio let us know and we would be happy to answer any questions you have.