Good Year for Central Texas Builders
(Housing : Austin-Round Rock) 1/5/2007

AUSTIN (Austin American-Statesman) – Builders started construction last year on a record number of homes in Central Texas. The supply of new, unsold homes also climbed to a record level, prompting builders to start 10 percent fewer homes in the last quarter of 2006 than the previous year.

About 2,900 new homes — just over a two-month supply — were available in Central Texas in December. But experts, citing the local healthy economy, predict the supply of unsold homes, which rose slightly in 2006’s fourth quarter, will diminish by spring.

Builders started almost 16,750 homes last year, a 10 percent increase from 2005, according to Residential Strategies Inc., a Dallas-based market research firm. There also were a record number of closings, which jumped almost 23 percent to more than 16,000.

The median sales price of a new home in Central Texas rose 8 percent to nearly $196,500.

Unlike other markets in the nation where prices and sales are cooling, Central Texas has experienced healthy job growth, a steady stream of newcomers and relatively affordable prices. For the 12 months that ended in November, 24,800 jobs were created in the Austin area, according to the Texas Workforce Commission.

“Homebuilders are cautiously optimistic about the market,” said Dr. Jim Gaines, research economist at the Real Estate Center. “A slowdown in sales and buildup in inventory should lead to fewer speculative units. Builders are looking forward to spring activity that will probably dictate the rest of the year’s activity levels. Employment and population fundamentals are in place, so adjustments in the market should be relatively minor.”