by BILL PETERSON
Agreeing with the perceptions of local real estate agents to the effect that the local housing economy is much rosier than the national picture, the Hays CISD projects an increase of new housing starts in 2008.
Carter Scherff, Hays CISD’s Chief Financial Officer, said house starts should climb to 1,331 within the district in 2008 after falling to 1,185 in 2007. The projected increase in home starts indicates that builders anticipate the continuing absorption of existing new home inventory.
If the school district’s numbers are correct, then the local housing downturn took place in 2007, following a record housing boost in 2006.
Basing his numbers on contacts with local builders, Hays CISD’s demographic information and data from Residential Strategies, Inc., Scherff said starts declined 25 percent to 1,185 in 2007 from 1,574 in 2006, while new home closings declined 14 percent to 1,296 units in 2007 from 1,501 in 2006.
If 1,331 new homes should be started in 2008, it would be the second highest number, if barely, in the school district’s history. Hays CISD said 1,330 new homes were started in 2005, which suggests that 2008 would return the local new home market to something of a normal pace.
“A lot of our builders appear to be isolated from the national market, and I don’t anticipate them slowing down,” Scherff said.
Area real estate agents say the local new housing market is further insulated from national trends because it has been driven by demand, rather than speculation.
The school district has not projected a number for new home closings in 2008. However, its data indicate that finished vacant inventory remains tight at 1.7 months.
Judging from 1,296 new home closings against 1,185 new home starts in 2007, going on ten percent of the new home sales last year consisted of pre-existing inventory. Last year was the first in the last four when new home closings outpaced new home starts.
From 2004 through 2007, according to Hays CISD’s data, builders within the school district’s boundaries produced 5,303 new home starts and 5,092 new home closings, indicating that 211 vacant new homes were on the ground at the close of 2007.
As of Jan. 28, Hays CISD said 383 homes were listed for sale within the school district. The school district also added up 1,135 re-sales for the first 11 months of 2007.
For 2008, Hays CISD projects 135 starts in Hometown Kyle, 132 starts in Shadow Creek, 130 starts in Whispering Hollow, 118 starts in Kensington Trails, and 91 starts in Waterleaf.
Builders within Hays CISD set quarterly records for new home starts in the first three quarters of 2006, peaking at 457 in the third quarter. Starts then declined dramatically to 297 in the fourth quarter of 2006, followed by 285 starts in the first quarter of 2007 and 265 in the second quarter of 2007 before rebounding to 341 in the third quarter and dropping back to 294 in the fourth quarter.
For six straight quarters, from second quarter 2005 through third quarter 2006, the school district set records in home starts for corresponding quarters (first quarter against first quarter, second quarter against second quarter, etc.) before slowing down in fourth quarter 2006.
New home closings within Hays CISD reached corresponding quarterly records in all four quarters of 2006, peaking at 435 in the third quarter. The first quarter of 2007 set another first quarter record with 367, giving the school district five straight quarters of house closing records for corresponding quarters. Starting with the second quarter of 2007, new home closings slowed down to levels that still mostly outreached corresponding quarters from 2004 and 2005.
While new housing starts reached a four-year low at 1,185 in 2007, new home closings were the second highest on record at 1,296 in 2007, even though that represented a 14-percent drop from the record of 1,501 in 2006. Third quarter 2007 closings (342) were still the second highest third quarter, and fourth quarter 2007 closings (301) were the second highest fourth quarter in the school district’s history.
While business generally disdains any kind of slow down, Hays CISD officials are relieved to be delivered from the torrid pace of 2006. Regardless, Hays CISD Superintendent Kirk London said he anticipates little more than a mild local slump in the first half of 2008.
Said Scherff, “We’re slowing down and I think it’s good because it gives us an opportunity to handle growth better.”
BILL PETERSON is editor of www.HaysHighway.com where this article was originally published. It is reprinted here through special arrangement.Email | Print
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Those readers who don’t have their heads in the sand realize that neither Central Texas nor Hays County is insulated from serious problems occurring in the national and international economies. The impact of a credit crunch, slump in housing starts, slowing employment and decling real wages in the face of an increasing rate of price inflation is already having its effect on the Austin economy. And Hays County is beginning to feel the effects too.
Housing demand from folks who sold their California homes and moved here, helping to drive up local home prices, has all but dried up.
New office building starts in Austin have dropped substantially and new job creation in Central Texas has already began its decline according to the latest U.S. Labor Dept. statistics. The official statistics are lagging behind reality and by this August the local labor market will be under severe pressure.
Lagging U.S. Department of Labor statistics reveal that two major elements of wage and salary employment in our area are already declining, i.e., trade, transportation and utilities category, and government spending.
To believe that our local county economy is insulated from the worldwide economic problems confronting us defies common sense and flies in the face of economic reality. We should be preparing to tighten our belts for the economic recession that is upon us and not taking a Polly Anna attitude about public spending.
Lower property taxes will only come with declining property valuations, and appraisal districts will be a lot slower to lower appraisal values than they were to raise them.
Charles O’Dell, Ph.D.
Wow! I’m impressed! I thought Charles O’Dell was just the President of some local organization. I didn’t know he was an economist too.
Is this the same Charles O’Dell that graduated from the University of Maryland with a Ph.D from the College of Agriculture and Natural Resources with a dissertation entitled “A Simulation of Long-Run Adjustment Patterns in Capital Formation in the Grain Handling and Storage Industry, 1968-1975” or is that a different Charles O’Dell? If so, what exactly are the similarities between the economic models of agri-business and commercial land development?
If it is true that we are looking at a sagging economy, then now more than ever we need to invest by putting some money into much needed public works. Constructing the roads we really need would inject some money into our economy without requiring those roads to be tolled or privatized. There is also a bill in the US Senate creating an Infrastructure Bank (introduced by Senator Dodd) that would invest in all sorts of public works projects across the United States.
Besides, another bubble will come along to save us…It’s probably already out there.
Lila Knight, M.A.
What the public must know are the sociological tendencies of Charles O’Dell! Truth and veracity are not strong suits for Charles O’Dell who has been willing to say anything, do anything to instill fear and loathing at his usually quite innocent opponents. Watch, listen and learn and the unsavory real Charles O’Dell will present hismself before your very eyes after just scrutiny.
This is just silliness. All you have to do to see is to open your eyes and look around at the houses being built, the ones remaining empty of owners, those being lived in that can NOT be sold and the ones in or nearing foreclosure.
What a surprise! Hays County finally has a housing glut.
Runaway developing and a Dripping Springs Board that has permitted developers to do virtually what they please in the adjacent sections external to city limits.
Case in point is the lapse of judgment in permitting the doubling of lots in Rim Rock (Driftwood) because the developer also used poor judgment in trying to sell 5-10 acre lots at a higher cost, which didn’t go. Consequently, the platt was revised to increase the number of lots for sale using 1-3 acre lots at a lesser cost and the DS Board gave it the “green light”.
So the area that would have had an increase of approximately 150 new residents will have more than 300?
Similar developments have been planned all over Hays County.
How does that help the community in value, traffic congestion, school enrollment, road maintenance/wear and other issues?
Hays County is getting what it deserves for being foolish.
We will continue a market with fewer sales and more building for quite some time with an ongoing glut in new housing.
To add to the tax woes of residents, our thoughtful commissioners recently increased our sales taxes.
How does that help the community and homeowners?
BTW, Mr. Ramus, what does anything you stated have to do with the topic of the “Hays County housing market”? Please refrain from bad-mouthing anyone on this site, Mr. O’Dell or anyone else. If you have nothing positive or informative to add, say nothing.
Amen Mr. Stern !
And as far as mr.ramus…. I cannot or will I ever trust a man that does not take his one size to small cowboy hat OFF before speaking to a group of people. Show some repect !
That is all….
As a lawyer whose firm handles a significant number of Hays county bankruptcy filings and who just happens to happens to have degree in Agricultural economics I offer the following:
1. I don’t know who Dr O’ Dell is but what he says makes sense;
2. The number of folks seeking our services to keep their homes from being foreclosed has increased dramatically;
3. As a closing agent for certain lending entities I have seen the volume drop substantially
3. We are not immune from the economic downturn because of the reasons cited by Dr O Dell.
Charles O’Dell has more than earned my ire. I am quite the novice when it comes to abusing people publicly Charles O’Dell is past Master at it. Villainy comes quite easy to him. Even sending three pages of false and unfounded allegations to the District Attorney Sherri Tibbe. No, Charles will get his comeuppance when people recognize his inability to tell the truth. As far as hats are concerned it is what is underneath the hat that counts, one can only find that out by ernest dialog.
There is already an entire thread (or more) devoted to the issue between you and O’Dell. Please don’t drag it into this or other threads. It adds NO value.