San Antonio has plenty to offer these days, and it's not just the sunshine, the Alamo, or the River Walk. As Tundra pick-ups start rolling off the line at Toyota's new truck plant this summer, the city has kicked into overdrive in housing, jobs, and migration of people moving to central Texas from all over the country.
With job growth at 3.1 percent—almost double the national figure of 1.7 percent—and more than 13,000 residential housing permits issued last year, San Antonio is fast becoming a Mecca for new companies and home builders. The city ranks in the nation's top 20 among metros attracting out-of-state migrants. What's more, in 2005, 16 companies relocated there, bringing along 6,885 new jobs. The Florida Marlins and the New Orleans Saints are considering moving to Alamo City, too. The Toyota facility alone is expected to create 2,000 new jobs this year, not to mention hundreds of ancillary ones in the auto industry.
“When you put a facility of that size where it's going to go, that will undoubtedly spur housing,” says Mark Hager, director of the Center for Community and Business Research at the University of Texas at San Antonio. San Antonio's employment growth magnetism is one thing. Add to that Texas' notoriously low-barriers to entry for builders, like vast land supplies and negligible state and county restrictions, and you've got a sharp contrast to the malaise settling in among the nation's other home building metros.
All this is good news for the nation's largest home builders who might be scouting for a new building beachfront. San Antonio, the eighth largest city in the United States with a population of 1.9 million, is expected to grow more than 7 percent in the next five years. There's no shortage of open land, and city fathers have rolled out the welcome mat for new companies and residents.
MARKET DRIVERS Other factors are at play, too. While Toyota and its $850 million plant have been catalysts for growth, builders are taking advantage of great weather, a relatively low cost of living, and an influx of Californians exiting high-cost, overcrowded communities with plenty of equity in their pockets. Not only that, many military personnel who had been stationed at one of several bases in San Antonio remember the place fondly and often return to retire, according to several experts.
While most metropolitan areas are forecasting small to steep drops in housing prices this year, Fortune magazine reported in February that San Antonio may see an increase in housing values by about 8 percent in 2006. The median price of a home is currently $138,000.
This year, home builders anticipate 18,000 starts, up from 16,000 in 2005, and only 6,000 in 2000, according to Dave Matlock, division president of Standard Pacific Homes in San Antonio. The company plans to build 1,000 homes in San Antonio this year, Matlock says.
“What you are seeing are some fairly strong corporate employers coming here,” Matlock says. “You are going to continue to see movement of that nature to San Antonio, all driven by affordability and quality of life. There's a good infrastructure that will continue to draw employers into it.”
The San Antonio division of KB Home built 2,300 new houses in 2005, a 10 percent increase over the previous year, says KB division president Craig Westmoreland. Westmoreland says KB expects continued growth momentum for the next 24-to-36 months.
Learn more about markets featured in this article: San Antonio, TX.