Austin Real Estate Blog

First, the bad news. New home construction in the Austin area in 2008 is still far below where it was this time last year. Housing starts had been sliding since the third quarter of 2006, possibly a delayed reaction to the national house construction slump. The 2,814 new homes started in the second quarter of 2008 is 19 percent when compared with second quarter home starts in 2007.

Buyers are still skeptical and reluctant to make an investment in real estate while conditions remain so uncertain. In the second quarter of 2008, 2,728 new homes were sold, compared with 3,110 in the first quarter. This is down 19 percent from the same period last year.

It’s not only the buyers who are wary in the midst of this housing slump, either. Builders are concerned that prospective buyers can qualify for and obtain mortgages. Lenders, too, are cautious and have raised their standards. After the fiasco of sub-prime lending practices and loose requirements resulted in the current credit crunch, state governments and government mortgage guarantors have cracked down on lending practices.

Now, the good news. Housing starts in the second quarter, though lower than last year at the same time, are up from the first quarter housing starts of 2,303. This is actually a smart move on the part of home builders, who are want to keep their inventory low. There were 11 percent fewer vacant homes on the market at the end of the second quarter than the previous quarter.

And, for those who qualify, lending rates remain low and builders are willing to negotiate for bargain prices.