Austin Positive Housing Trend Forecast for 2012
Below is a summary of a very informative meeting we attended. This positive forecast is what many of us have been feeling recently. We would welcome any discussion or answer any questions you might have. Just give us a call.
Austin Business Journal by Cody Lyon, Staff writer
Date: Thursday, January 12, 2012, 1:14pm CST
The housing market in Austin will continue to see improvement in 2012, according to the Fourth Annual Housing Forecast.
Cody Lyon Staff writer - Austin Business Journal
Austin’s housing market saw improvement in 2011 and that trend is expected to continue in 2012, according to the Fourth Annual Housing Forecast event on Thursday.
Job growth, increasing population and a tightening rental market this year will result in higher demand for housing in the Austin region though the forecast suggested strict mortgage underwriting criteria and subdued consumer confidence will likely limit new home sales in our market in the coming year, a release from the meeting said.
The event was co-hosted by the Home Builders Association of Greater Austin and the Austin Board of Realtors at the Renaissance Austin Hotel.
“For 2012, Metrostudy expects new home production in the Austin region will increase for the second straight year,” said Eldon Rude, director of the Austin market for Houston-based Metrostudy who moderated the event.
The most recent residential survey from Metrostudy indicates there were 6,115 new home starts in the Austin region in 2011. This represents a nearly five percent increase in starts from 2010.
“Home starts were up over 2010 levels in every price range except under $150,000, with the strongest increases in the move-up price points between $200,000 and $300,000. While buyer demand is increasing in the first-time market below $150,000, strict mortgage underwriting criteria are making it increasingly difficult for potential buyers to qualify for a loan,” Rude said.
Another factor that might limit new home starts in 2012, especially in more high demand areas, is a lack of developed lots to accommodate new home construction, Rude said.
“We started nearly 12,000 homes in Austin over the last two years while delivering only 8,000 new lots, resulting in a shrinking supply of lots in the most desirable areas. This might not only result in fewer home starts in some areas, but it could also lead to increased home pricing in certain locations due to an imbalance in lot supply”, said Rude.
Financial market volatility was also on the mind of panelist Dr. Greg Hallman, senior lecturer in finance and real estate finance at the University of Texas’ McCombs School of Business.
Certain parts of the U.S. economy are growing — such as technology and some business capital spending — but overall growth is not strong or widespread, Hallman said.
“Volatility measures from the financial markets indicate that investors are still worried, and likely with good reason,” said Hallman.
The biggest worry is a financial-banking crisis in Europe, triggered by government defaults, Hallman said.
Weather and water resources are major concerns for homebuilders.
Noting the past year’s heat and drought records, KXAN Chief Weathercaster Jim Spencer said the outlook for 2012 is not promising.
“If this spring proves to be as dry, Central Texas may be looking at another excessively hot summer. Worsening drought conditions could result in severe water restrictions for cities in our area and across the state,” Spencer said in the release.
Eldon Rude ended the meeting with stating we are all survivors…we have made it this far. Here is to not just surviving in 2012, but thriving and prospering!!!!
Make it a great year!