S.A. new-home starts down 33%; housing inventory still falling

By Aïssatou Sidimé - Express-News New-home starts dipped 33 percent during the last quarter, but still were outpaced by the number of home closings, according to a new report. Still, rising lot inventories signal that the San Antonio housing market still has a supply imbalance, experts say.

San Antonio builders started 2,330 new homes in the three-month period ended Sept. 30 -- down 33 percent from the same period last year, according to Residential Strategies Inc. They closed sales on about 2,600 homes during the third quarter, down 36 percent from a year earlier.

That places builders on track to sell between 10,500 and 11,000 new homes by year-end, RSI's San Antonio representative Cassie Gibson said.

San Antonio builders have been working to reduce housing inventories since late last year. While it appears to be working, based on the number of homes sold, builders are seeing a rising level of empty lots.

The number of vacant developed lots was 39,884, up 2,000 lots from the previous quarter. That's more than double the level considered to represent a balanced housing market.

“San Antonio's 50.7-month supply is the highest of Austin, the DFW-corridor,” Gibson said.

Michael Moore, a partner in Ironstone Development, said housing demand is so slow that his business nearly has dried up.

“At any one time, we used to have four to five projects going; but this year, we haven't started a new subdivision in nine months,” said Moore, president of the Greater San Antonio Builders Association.

San Antonio housing developers say inventories could continue to rise as demand dips in response to tightening credit and new federal rules that ban builder-funded cash gifts to buyers. Those gifts played a key part in sales for new homes priced under $150,000, he said.