http://www.mysanantonio.com/business...t.27166de.html
Jennifer Hiller EXPRESS-NEWS BUSINESS WRITER
Publication Date : January 11, 2007
San Antonio real estate had a jaw-dropping year in 2006, with San Antonio builders starting more homes than there are residents in Alamo Heights, Boerne, Castroville and Lytle combined.
Builders started 19,092 new single-family homes, 15 percent more than in 2005, according to Metrostudy, a housing research firm. (There were 18,554 residents in those cities in 2000, based on U.S. Census numbers.)
It marked the sixth consecutive year of record-breaking building, and was an impressive enough number to cause a roomful of 750 real estate professionals to gasp collectively at Wednesday’s 2007 Housing Forecast event.
The exuberant building pace and shocking statistics are unlikely to make repeat appearances this year, however.
San Antonio housing has seen a significant shift, and the market for new and existing homes isn’t as strong as it was at this time last year, said Jack Inselmann, a new-housing analyst with Metrostudy.
Home-buyer traffic has slowed in new neighborhoods and builders are having a harder time closing sales -- a change many builders started noticing during the summer.
But don’t cry for the builders.
They’ll still start construction on 17,000 homes this year. It’s an anticipated decline of 10 percent to 15 percent, but would still be the second-best year on record -- after 2006.
’‘The housing bubble has burst, right?’‘ Inselmann said. ’‘All is lost, right? Absolutely not.’‘
A continuing healthy job market and the arrival of new residents will continue to fuel the need for new homes, he said.
Home buyers closed on 16,988 new single-family homes last year, up 17 percent from 2005.
But housing starts peaked from late 2005 until October 2006, when San Antonio builders reached 19,527 annual starts, a 30 percent increase over the comparable period the year before.
Since then, in the fourth quarter of 2006, the pace of annual housing starts dipped 2.2 percent, Inselmann said.
An abundance of investor interest in San Antonio last year -- driven by a December 2005 Fortune magazine article -- should be coming to an end.
Fortune projected that the Alamo City would be the nation’s best real estate market in 2006, and out-of-state investors who had cashed out on the East or West coasts headed to Texas.
In the end, however, San Antonio ranked 95th nationally in price appreciation, with the median price of existing homes rising more than 7 percent and average sales prices rising 9 percent, Inselmann said.
Out-of-town investors created an artificial market when they made down payments on homes and then canceled their contracts when they figured out they would be able to flip a property for a double-digit gain.
’‘It’s probably the worst thing that affected our market this year,’‘ Inselmann said. ’‘I think we’ve gotten most of those people out of here.’‘
San Antonio’s inventory of new homes for sale rose as a result of the investor interest, but builders were lucky.
San Antonio was left with a 1.7-month supply of new homes for sale, still the lowest in Texas.
’‘We came close to making an error in our housing market,’‘ Inselmann said.
San Antonio real estate has been on an upward trend since 1990, when builders started just 2,000 homes.
’‘This market is on a 17-year run,’‘ Inselmann said. ’‘Ladies and gentlemen, it can’t go on forever.’‘
San Antonio’s market for existing homes has also been on the rise, with prices and sales volume rising in virtually every part of the metropolitan area.
’‘When we thought things couldn’t get any better in the real estate industry in 2005, we were wrong,’‘ said Tom Patterson, chairman of the San Antonio Board of Realtors.
While several boom markets around the country have faltered in the past year, San Antonio residents and real estate professionals can be thankful for growth that traditionally moves at a steadier pace, Patterson said.
More than 24,000 single-family homes changed hands in 2006, up 6.6 percent over 2005.
As long as interest rates remain low and San Antonio’s job growth continues, the real estate market should remain healthy, Patterson said.
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