Uncertainty Continues On
November 20, 2025
First of all, THANK YOU! San Antonio for passing Bexar County Prop A and B! Well Done! 248,428 votes were cast and over 53% and 57% supported Prop A and B respectively. We are moving forward and not backward!
Now that the Uncertainty for our local metropolitan area is settled, there are still plenty of other uncertainties for us to consider. My colleagues in real estate feel like we are on the verge of an outbreak of optimism, but we have been on that edge all year and can’t seem to break through.
We know that real estate is a huge capital investment whether it’s your home or an office building or retail center. Financial decisions of this magnitude must involve serous and careful financial analysis. However, when it comes down to the final decision, I believe it is 90% analysis and 10% emotion. How you feel about the deal is the last trigger to move forward or not. And right now, the uncertainties in our lives are keeping those positive feelings in check. Uncertainty can also be called confusion and even fear. It’s often said that investors hate uncertainty. Let’s look at the issues piling up on the uncertainty column.
Politics
I only address the issue of politics to say that as a nation we have never been more sharply divided. This uncertainty will not go away any time soon. It is a matter for us to learn to deal with our differences with respect and move forward regardless. Hopefully, we will learn how to agreeably disagree again.
Tariffs
Tariffs was a huge issue in the first part of the year, but it seems to have turned into more a scare than a reality. The president deliberately uses an unsettling negotiating approach. It is not an accident. He uses his brash style to throw people off balance and make them consider courses of action that they might not otherwise consider. Uncertainty is part of his skill set, like it or not.
Interest Rates
Interest Rates are coming down, but more slowly than many would like. Some are beginning to fear Recession and that might bring rates down faster. However, the FED seems uncertain what to do.
As we watch interest rates gradually decline, albeit at a pace that tests our patience, the sense of uncertainty extends to the Federal Reserve’s next move—will they act decisively, or wait for clearer signals from the economy? This lingering ambiguity feeds into broader concerns about recession, job stability, and the shifting landscape of major employers relocating operations or downsizing, leaving many in the local market wondering what’s next. The ripple effect touches everything from commercial investments to residential affordability, and even as some sectors show signs of resilience, others remain clouded by unanswered questions and cautious optimism.
Jobs
There have been announcements of large layoffs by Amazon, 14,000 and UPS, 48,000. Other companies are also finding the will to lay off or just not hire to fill natural attrition. The job market is shaky and uncertain. Then, large financial companies are moving thousands of employees to brand new offices in Dallas like Goldman Sachs, 4,500 and J.P. Morgan Chase 18,000.
AI
Will we be able to build it fast enough for AI? How many jobs will be lost? Does it threaten our energy reliability because it creates a huge demand for new electricity sources? Will the machines take over the world? Will this be Armageddon when an evil genius can control it and become the Antichrist?
Affordable Housing
We cannot build enough affordable housing, in fact, any new construction that is affordable must be heavily subsidized with tax dollars. What about the homeless?
National Debt
Will the national debt eventually choke our economy and crash our dollar? Personal debt is reaching all-time highs. Credit card debt in Texas is over $12,000 per person and one of the highest for any state. Sub-prime auto loans are at historically high default rates. Then, the 20-somethings, who did not have to pay student loan debt for three years, now have to start paying again, but they ramped up their lifestyle which they now can’t afford. How to buy a new home? How to afford to have children?
Will the government shutdown cause a Recession? What about the government layoffs? Is the stock market too over-valued? How do we address income disparity and close the gap between the rich and the poor? As our population declines, where will we find the workers we need for the future?
I regret to inform you I have no answers to any of these uncertainties and problems.
Let’s Make it through December
Perhaps, “if we make it through December” as Merle Haggard sang, there will be a warmer time next year. That is, springtime is the time of rebirth and renewal and perhaps that will bring optimism back.
Positives and Negatives
In San Antonio, we are racking up positives and negatives. We lost the Army North (5th Army) and Army South (6th Army) from Ft. Sam Houston, which will cost an uncertain number of jobs. However, our new heavy equipment manufacturer, JCB, has significantly increased the size of its plant to one million square feet. This is because of the tariff negotiations by the Administration. Then, Japan has pledged to increase its investment in auto manufacturing in the U.S., so would that mean a significant expansion at Toyota? Last year they committed to a $531-million expansion here, with four hundred new jobs. Further expansion is, well, uncertain.
Retail Real Estate
Retail real estate in San Antonio is doing very well. Occupancy levels are in the high 90% range, primarily because it is so expensive to build new retail centers and rents for new space are extremely high consequently. Restaurants, however, are still suffering and have not fully recovered from the Covid shutdowns with the new fragile spending habits we have all adopted. Baby boomers are retiring and spending less, and as I mentioned, younger folks are suffering with debt burden. Eating cheaply is in fashion. Apartment vacancies have soared because of the new supply that has come online in the past year. Occupancies of near 95% a few years ago have lowered to under 90% now. Much lower starts this year will cause a catch-up next year. Office leasing is slow, but industrial big box has started picking up. New home construction is flat, with only homes under $300,000 gaining traction. The average new home price has dropped 3.3% in the past year.
All in all, I am certain we will “make it through December.”