Area housing market poised for rebound, firm says

Data suggest home starts have neared bottom as tax credit attracts buyers.

By Shonda Novak

AMERICAN-STATESMAN STAFF

Published: 8:05 p.m. Monday, Jan. 4, 2010

A bottom is in sight for Central Texas‘ new-home market, with a slow recovery expected this year, according to Residential Strategies Inc., which tracks the housing market.

Builders started 1,389 new homes in the fourth quarter of 2009, down 7.2 percent from the same quarter of 2008, Residential Strategies reported Monday.

By comparison, in the last three months of 2008, starts were down 50 percent from the year-earlier quarter.

The emerging improvement largely stems from a homebuyer tax credit. Congress expanded and extended the credit in late 2009 until June 30 of this year, provided the home is under contract by April 30.

“We view this market performance favorably as indicating that the bottom of the market has been, or will soon be, reached,” said Tommy Tucker, Austin division manager for Residential Strategies.

For all of 2009, builders started 6,784 homes, down 24.6 percent from 2008.

The median new-home price declined to $201,481 in the fourth quarter from $206,888 in the previous quarter, reflecting sales in the lower price ranges spurred by the tax credit as well as “pricing pressure in general as builders continue to reduce their inventory,” Residential Strategies said.

The 2,099 closings were down 8.9 percent from a year earlier, after three quarters of drops greater than 30 percent.

Tucker said the tax credit “will continue to provide a spark for the home building industry through the first half of 2010 as we emerge from these recessionary times.”

Eldon Rude, local director for Metrostudy , a housing research firm, said that “the Austin new-home market will be one of the first markets across the U.S. that shows signs of recovery.”

“Our relatively stable home pricing, minimal levels of available inventory, lower volume of foreclosures and the general resilience of our economy are in sharp contrast to many areas of the country that will be much slower to see recovery in their housing markets,” Rude said Monday