San Antonio Builders Continue To Limit New Home Starts
April 10, 2008
Builders continued to curb new home starts in the Greater San Antonio area during the First Quarter, 2008. Builders initiated 2,223 starts for the quarter, a decrease of 1,610 units (‐42%) compared to 1Q07 (3,833 starts). On an annual basis, starts fell from 13,647 at YE 2007 to 12,037, a decline of 11.8%. “San Antonio peaked at 20,089 annual starts in 1Q07, thus there has been a decline of about 40% in activity to date. Compare that to the national decline in single family detached start activity of 1,837 million annual units to the current pace of 707 thousand units (‐62%), it is evident that San Antonio has fared better than many areas throughout the United States” notes Cassie Gibson, Residential Strategies, Inc. San Antonio representative.
Builders closed 2,999 new homes during 1Q08, a decline of 1,198 units compared to 1Q07 (‐28.5%). After cresting at 16,858 annual closings in 2Q07, the market has declined 15% to 14,319. “The positive sign is that builders continue to close more units than they have started, and the Greater San Antonio market experienced 2,282 more closings than starts over the last four quarters” notes Gibson. “This indicates that the builders are dedicated to making sure that there is not a build‐up of unsold housing inventory like there is in many challenged areas of the nation.”
Perhaps the brightest spot in the San Antonio housing market is the fact that the supply of finished vacant houses is in very good shape. The supply was reduced by 115 units for the quarter, and the inventory represents a 2.4 month supply, just below the threshold of acceptability. “In many coastal markets in the U.S., the severe over‐building has led to significant price declines. Buyer incentives do exist in the San Antonio market, but the supply of finished vacant inventory is in good shape, even compared with other Texas markets such as Austin and DFW” states Gibson. The median new home price continues to climb in San Antonio, now at $183,036, up 6.3% from 1Q07 ($171,544). While the median new home price has increased, this market still represents an excellent value compared to Austin (median price of $211,701 in 1Q08) and DFW (median price of $202,529 in 4Q07). Nationally, the 20 city composite index for the S&P Case‐Shiller shows that there was a 10.7% decrease in home values for the 12‐month period ended January, 2008.
Another encouraging sign is the limited amount of new construction. At the end of 1Q08, there were 2,893 new homes under construction, a reduction of 18% vs. YE 2007 (3,538) and 48% from a year ago (1Q07‐5,582 units).
While new home supply in San Antonio is in good shape, the resale market is experiencing a slight oversupply, according to the Texas A&M Real Estate center. The month’s supply of existing home inventory stood at 6.5 months at the end of February, 2008. A 6 month supply is considered a balanced inventory. There were a total of 12,631 listings on the market as of February, 2008.
Source:Residential Strategies, Inc. (RSI) is a Texas market research and consulting firm specializing in new
home activity. RSI is represented in the San Antonio area by Cassie Gibson.
Comments
