Aug. 11, 2008 - S.A. Builders Continue to Tackle Oversupply

S.A. Builders Continue to Tackle Oversupply

San Antonio-area builders continued to chip away at the oversupply of new homes that has saturated the market since 2006, selling more homes than they started in second quarter 2008. Local builders started 2,495 homes in 2Q 2008, down 35% from the 3,832 homes started in second quarter 2007, according to a Metrostudy report. Builders sold 2,857 homes, though that's still 26% fewer than the 3,864 homes they sold in 2Q 2007. The slowdown is part of a calculated strategy started in late 2006, builders say, to keep the market healthy by selling through the oversupply of homes that hit San Antonio that year. Since 2006, local builders have been advised to cut housing starts to a cumulative 10,000 or less for any 12-month period in order to absorb all excess homes, according to Jack Inselmann of Metrostudy. Earlier this year, Inselmann projected the goal would be met by the end of September. The declines are well underway, with San Antonio having the tightest monthly housing inventory of the roughly 40 major markets tracked by Metrostudy. Inselmann has since revised his target date to the end of 2008, citing the credit crunch caused by problems at Fannie Mae and Freddie Mac and rising oil prices. Meanwhile, many San Antonio builders are cutting inventories by minimizing their number of spec homes.

Source:  Metrostudy/TAMU/Skye (August '08)