Austin Area New home starts remain strong through second quarter
This is from todays statesman.com online. New home sales are doing well in Austin but there are signs that the market could be cooling slightly.
FROM STAFF AND WIRE REPORTS
Wednesday, July 05, 2006
New home starts remain strong through second quarter, But inventory is creeping up, hinting at a potential slowdown.
Central Texas home builders continue to construct new homes at a high pace.
Home builders started work on 4,171 houses from April through June. This is slightly lower compared with the 4,671 new home starts during the second quarter of 2005.
Still, home builders cranked out 16,467 houses during the past 12 months, the second-highest reading in Central Texas’ building history, according to market research firm Residential Strategies Inc.
Home closings during the second quarter also hit a record, with 4,003 new homes closed from April through June.
Yet there are a few signs that the hot home building market in Central Texas is cooling slightly.
Despite the surge in closings, the inventory of finished vacant houses climbed slightly from 2,338 units at the end of March to 2,435 units at the end of June — about a two-month supply at the current sales rate.
Yet the Central Texas market remains stronger than many other markets across the nation, said Mark Sprague, partner with Residential Strategies Inc.
Numerous reports are emerging from the East and West Coasts regarding a slow-down in buyer traffic, causing buildings to discount heavily and increase incentives. Yet in Austin, traffic and sales have remained relatively steady for most of the spring, he noted.
Because of this national slowdown and the recent increase in mortgage rates, however, Central Texas home builders are being cautious about building up too much inventory, he said.
“Hard lessons were learned with the over-building of the late 1980s,” Sprague said in a written statement.