I-35 NEX South Phase 3 Has Broken Ground — Here's What It Means for San Antonio Real Estate

If you own, buy, sell, or invest in real estate along San Antonio's south side, you need to know what started happening in late March 2025. TxDOT officially began construction on South Phase 3 of the I-35 NEX project, a 1.14-mile segment running from the I-35 and Loop 410 South interchange north to FM 78. The budget sits at $84.5 million, and TxDOT expects the work to wrap up in late 2028.

That is a roughly three-and-a-half-year construction window along one of San Antonio's busiest corridors. Understanding what that means for your real estate decisions right now — whether you are buying a home, listing one, holding a rental, or scouting an investment property — can make a real difference in how things play out for you.

First, let's talk location. The I-35 and Loop 410 South interchange is a major hub for south San Antonio. The surrounding area touches neighborhoods and communities including Kirby, Elmendorf, and portions of the Judson Independent School District and South San Antonio Independent School District zones. ZIP codes in the immediate vicinity include 78219, 78220, and 78223, all of which have seen steady investor attention in recent years because of their relative affordability compared to the north side and their proximity to major employment corridors.

For investors, this is the headline: infrastructure investment of this scale almost always signals long-term appreciation in the surrounding area. Roads get better, commute times improve, and businesses follow. If you have been eyeing rental properties or fix-and-flip opportunities in south San Antonio, the groundbreaking on this project is a meaningful data point in your favor. The flip side is that construction itself brings short-term friction — traffic congestion, noise, and access disruptions — which can soften demand temporarily and create buying opportunities for patient investors willing to look past the orange cones.

For homebuyers, the calculus is similar. If your budget is pointing you toward south San Antonio and you have flexibility on timing, buying during the construction period rather than after it could mean getting into a neighborhood before values fully reflect the improved infrastructure. That said, you should be realistic about what living near active construction looks like day to day. Talk to your agent about which specific streets and subdivisions fall close enough to the corridor to benefit from the finished project but far enough to avoid the worst of the construction noise and detour traffic.

For current homeowners in the area, the next few years call for patience. Property values near major construction projects can stagnate or dip slightly during the build phase, particularly if buyers perceive the area as inconvenient in the short term. If you are not in a rush to sell, holding through completion and listing closer to late 2028 — when the improvements are finished and the corridor is functioning better — is likely to put you in a stronger position. If you do need to sell now, pricing competitively and being transparent about the construction timeline with buyers will serve you better than trying to downplay it.

For renters and landlords, the south side of San Antonio has consistently offered more affordable rents than most of the metro, and that remains true today. Construction activity can create some tenant turnover if commute disruptions become frustrating, so landlords with properties directly adjacent to the work zone should think about tenant communication and retention. For renters who are considering whether to stay put or move, it is worth knowing that the disruption is temporary and the long-term picture for this corridor looks positive.

Zooming out a bit, the I-35 NEX project as a whole is one of the largest highway improvement efforts in San Antonio's recent history. South Phase 3 is one piece of a much broader effort to modernize I-35 through the metro area. Each phase that advances brings the city closer to a fundamentally better-connected south side, and that connectivity has direct implications for property values, business development, and quality of life.

Spring 2025 is actually a reasonable time to be having this conversation. The San Antonio real estate market is active, inventory has been shifting, and buyers and sellers are both trying to read signals carefully. A confirmed, funded, under-construction highway improvement project is not a rumor or a plan — it is a real commitment backed by $84.5 million in resources and a firm timeline. That kind of certainty is worth factoring into your real estate strategy.

If you are trying to figure out how this project affects a specific address, neighborhood, or investment opportunity, the team at 5 Star Real Estate knows south San Antonio well and can help you think through the implications clearly. Reach out anytime.