At year-end 2000, there had been less than a month's supply of finished housing and developed lots available in the region, according to American Metro/Study Corp., the Houston-based market advisory firm for home builders, lenders and developers. That's "an extremely tight level of completed inventory," assesses American Metro/Study. The report also concludes that the supply of vacant developed lots had totaled about 10,400 units, equal to a 10-month supply.
"If there is any area of concern in the Austin housing market as we enter 2001, it is the market for luxury homes priced above $500,000 to $700,000," says Eldon Rude, director of consulting for the Texas region. "With the sharp decreases in the equity markets during the last two-thirds of 2000, a segment of the demand for luxury housing in the Austin market effectively had its buying power stripped. High-end custom builders in the Austin market reported decreasing demand for their speculative inventory during the first month of 2001."
As the rest of the nation cowers at a slowdown, American Metro/Capital says Austin is thriving, boosted by an unemployment rate of less than 2% and annual job growth of 30,000. "These relocations have, in turn, translated into a huge demand for housing," says the study team.
There had been 2,995 new home starts in the fourth quarter while the total for the year, 12,038, is a record breaker. The fourth quarter tally represents the 13th consecutive quarter that starts had risen. In the past two years, new home starts have jumped 25% in the city.
In San Antonio, new home starts are about equal to 1999, says Jack Inselmann, American/Metro's Central Texas region director. The fourth quarter had 1,616 new homes under construction, representing a 4% decrease from the same period a year ago. Year 2000's annual rate had tallied 7,675 homes, down about 5% from the previous year.<P.There has been an increase in the number of high-end homes coming to market, says Inselmann. The trend is the result of major employers offering high-paying jobs although job growth had closed the year at 1.9% or 14,000 new jobs, a slowdown for the region, he says.
San Antonio housing and developed lot inventories are still tight, with just over a one-month supply of finished product available at the end of last year. "We expect that demand will remain strong in the new home market during the first half of 2000 as pent-up demand drives the market," said Inselmann. "The performance of the national economy as we move through 2001 will play a large role in determining the health of the new home market during the last half of the year."
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