Austin’s housing decline not as severe as others

Friday, January 30, 2009, 12:33pm CST | Modified: Friday, January 30, 2009, 12:57pm
Austin’s housing decline not as severe as others
reprinted from : Austin Business Journal
While Austin has seen a drop in housing starts, its decline from the market’s peak has been relatively gentle compared to other cities, according to research from Houston-based Metrostudy.

A study released Jan. 29 from the housing industry research firm said Austin has experienced a 66 percent decline in housing starts from its peak in the third quarter of 2006 to the end of 2008. That’s the smallest decline out of the 81 markets Metrostudy researched.

“South Florida’s quarterly starts declined 96.5 percent from their peak, and Naples-Fort Myers’ quarterly starts dropped 92.9 percent from their peak, as of the end of the fourth quarter of 2008,” said Brad Hunter, national director of consulting for Metrostudy.

The report also said the U.S. Department of Commerce’s latest reading on new home sales, which show that sales have fallen to the lowest level on record, understate the nationwide problem.

The U.S. Department of Commerce’s numbers showed 331,000 new homes sold at an annualized rate.

“The government’s new-home sales numbers ignore cancellations of contracts by reluctant home buyers,” said Hunter. “Buyers who have signed contracts to purchase homes are either unwilling or unable to close on those homes, and this trend is worsening in some markets because of the economy.”

According to Metrostudy’s research, the pace of new-home absorption has slowed sharply in almost every housing market in the country.

“Even markets that didn’t experience a price bubble, such as Texas and North Carolina, are getting hit by consumer panic, and homebuilders are suffering,” Hunter said.