Housing Starts Increase in Houston
Posted by Annette Russell | Under Finance Friday Feb 12, 2010Houston housing starts increased 6% during the 4th Qtr of 2009 compared to the same quarter of 2008, according to data released on Wednesday by Houston’s Metrostudy.
Builders started 4,576 new homes during the 4th Quarter and closed on 6,323 new homes.
The Houston area saw 12,164 new homes either finished or under construction during December, 2009.
“This is a clear sign the Houston area housing market’s in much better shape than other regions of the US” said Steve Silver, President of Silver Mortgage Funding, LLC and founder of The Real Estate Club of Texas.
“The numbers show that builders closed approximately 4,000 more homes than they built during that period and that inventory’s starting to tighten” said Steve Silver.
There were 65,925 vacant lots ready for development at the end of 2009, according to the Metrostudy data. This means there’s a 42 month supply of vacant lots…higher than the normal 20-24 month supply. But it also means that lots are available so builders won’t have to take the risk of land development as they acquire new lots.
Tax credits and low interest rates are helping to clear out inventories of available lots. And builders are benefiting from lower construction costs due to the much slower pace of construction compared to previous years.
“Available construction financing is the biggest challenge facing builders” states Silver. In return for construction financing, some banks are requiring that the builders build on lots already owned by the banks, often at above market pricing. But builders are agreeing to these terms because often it’s the only way to secure construction financing.
During 2010, Houston-area builders are calculated to build and sell 18,000 to 20,000 new homes. Supply and demand are gaining a healthy balance in Houston.
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