San Antonio's real estate market continues to run contrary to many of the large cities on the coast, and is still chugging along. Although days on market have lengthened from last year, and there are 33% more homes for sale, and prices are drifting downward from 25% appreciation levels in some neighborhoods, it has just begun to be a buyer's market. Rental income is still positive, especially with fewer entry-level home buyers able to qualify for admittedly dodgy mortgages. Forbes.com listed San Antonio as fourth on its list for home sellers; sixth for best overall housing markets.

The San Antonio Board of Realtors figures show that sales of single-family homes are only down 7% from 2006. Appreciation of 7% in turn overall from the same time period may not sound earth-shattering, but San Antonio has always been a very stable market, both slow to grow and slow to decline.

Home builders still have plans on the books for 14,000 more homes. In one of the most telling signs of the transition to a buyer's market, I was recently contacted by a builder's sales representative with a list of entry-level to midrange inventory homes  to sell. When I asked if the builder was currently selling to investors, the sales rep said yes--the first time I've heard that answer in 3 years. Another, higher-end, builder's sales rep cautiously admitted that they would sell some spec homes to investors, too.

Meanwhile, jobs and dollars are still migrating to the local economy. In the southwest part of the city, a $90-million Union Pacific Terminal is projected to make an economic impact of $2.48 billion in the next 20 years, while bringing new jobs to the area. San Antonio's military installations are getting an injection of federal funds, too: $506 million to Fort Sam Houston; $52 to Lackland AFB; and more than $11 million to Randolph AFB. All three military installations are located in areas of the city (or nearby Windcrest, Universal City, Schertz, Cibolo, Converse) that could benefit from more affordable, or more attractive, rental housing. I have been scouting out neighborhoods and properties--new and old, even fixer-uppers--and finding plenty of properties that I think would suit a long-term portfolio that would yield a combination of good appreciation and break-even or slightly negative cash flow.

And if you're buying a home to live in, of course, that's fun--there are many great neighborhoods to settle in and homes to choose from in the San Antonio metro area.