Housing Market Surges

 

78209 Housing Market Surges In December 2025

By Bruce X. Forey, REALTOR®

 

The Alamo Heights area closed 2025 with a bang. December brought significant price gains and faster sales, signaling renewed buyer confidence in one of San Antonio’s most desirable zip codes.

 

Prices Jump Sharply

 

Home prices climbed dramatically last month. The average sale price hit $748,262—a 39.9% jump from November’s $676,250. The median sale price rose to $550,000, up 12.5% from the previous month. Buyers also paid $287 per square foot, compared to November’s $251.

 

Homes Sell Faster

 

Properties moved faster in December. The median days on market fell to 84 days from November’s 110—a 42.4% drop. Sellers closed 23 transactions totaling $17.2 million, up from $13 million the month before.

 

Inventory Shrinks

 

Available homes decreased to 133 from 155 in November, pushing supply down to 5.2 months from 5.8. This tightening inventory could fuel further price growth in early 2026.

 

Negotiations Tell a Different Story

 

Despite strong sales, buyers maintain negotiating power. December sellers received 94.2% of their final asking price, down from 95.5% in November and 98.3% in October. This matters because many sellers reduce their original list price before reaching final negotiations. The declining percentage reveals that sellers need multiple price adjustments to attract buyers—even in a hot market.

 

Mortgage Rates Near Three-Year Lows Draw Buyers Back

 

Homebuyers are catching a break they haven’t seen in years.

 

The 30-year fixed-rate mortgage averaged 6.09% as of January 22, 2026, according to Freddie Mac—significantly lower than a year ago and among the best rates recently available. The 15-year fixed rate stood at 5.44%.

 

“With the economy improving and the average 30-year fixed-rate mortgage nearly a percentage point lower than last year, more homebuyers are entering the market,” said Sam Khater, Freddie Mac’s chief economist.

 

Uncertainty Threatens Progress

 

Federal housing affordability proposals initially drove rates lower. However, without concrete details—especially on President Trump’s announced $200 billion mortgage bond-buying program—markets are growing cautious.

 

Recent geopolitical developments add pressure. Trump issued an executive order targeting institutional housing investors at the World Economic Forum in Davos and hinted at a potential Greenland deal, though specifics remain unclear.

 

Investors dislike uncertainty. While weekly averages show improvement, daily rates may climb as markets await policy clarity.

 

Bottom line: Rates remain attractive, but buyers should act while conditions favor them.

 

San Antonio Prices Ease, Creating Buyer Opportunities

 

San Antonio homebuyers gained ground in 2025 as median prices dipped 1.6% year-over-year, according to Homes.com data. For families priced out during the pandemic boom, this signals improved affordability.

 

Other Texas cities saw price declines with Dallas-Fort Worth experiencing the biggest drop at 4.9%. Austin prices dipped 3.9%. Houston prices held flat compared to December 2024 – welcome news for first-time buyers.

 

Midwest Affordability Shrinks

 

The story flips in the Midwest. Of the 40 largest U.S. markets, only eight saw price appreciation exceed 4% in December—five were Midwestern cities. St. Louis led at 7.7%, followed by Pittsburgh, Cincinnati, Detroit, and Chicago.

 

Brad Case, chief residential economist at Homes.com, calls this market normalization. Sun Belt cities that saw pandemic demand surges followed by supply booms are now rebalancing.

 

For San Antonio buyers, timing has improved. The market’s correction creates entry points that didn’t exist during the pandemic frenzy.

 

Credit: Moira Ritter, Homes.com