Austin's New Home Market Slows

Posted at 8:41 PM, Feb. 8, 2009

AUSTIN'S NEW HOME MARKET SLOWS

AUSTIN (Metrostudy) – The latest data from Metrostudy shows a significant decline in the number of home starts and closings in the Capital City in fourth quarter 2008.
The firm recorded 1,430 single-family detached starts during the fourth quarter, a 48 percent decline (1,295 units) from fourth quarter 2007. The annual starts rate was 8,027 units, a 36 percent drop (4,420 units) from fourth quarter 2007.
Fourth-quarter closings declined 33 percent (1,108 units) from fourth quarter 2007 to 2,255 units. For the year ending December 2008, the annual closings rate of 10,181 units was 27 percent (3,834 units) below the annual rate reported at the end of fourth quarter 2007.
Since fourth quarter 2006, the most significant decline in starts was in the price segment below $200,000. During the two-year period, there were 5,135 fewer starts in this price segment, resulting in a 59 percent decline, compared with a 50 percent decline in the overall market.
“Capital constraints faced by builders and the tightening in credit for buyers played large roles in this decline,” said Eldon Rude, director of Metrostudy’s Austin division. “While starts of homes priced below $200,000 will likely continue to slow in 2009, most of the decrease in activity will be in the higher price points.”