A silver lining in sluggish home sales?: Market could be primed for new construction, agent says

By WES FERGUSON

Single-family home sales remained flat in the Kyle-Buda area in April, but at least one real-estate agent sees a silver lining in local market reports and predicts construction could be ready to pick up in the coming months.

The number of homes on the market in Kyle and Buda stood at 344 in April. That’s four greater than March but 15 percent fewer than the 405 active listings in April 2011, according to the Austin Board of Realtors.

Take the small housing inventory and factor in the rapidly quickening pace that properties are being sold – it took an estimated 68 days to move a home in April compared to 97 days in April 2011 – and you have a recipe for new construction, said John Sanford, owner of John B. Sanford Real Estate Services in Buda.

“When the market tightens up and there’s fewer houses to choose from, the buyers start making their decisions a little more quickly,” he said. “As the market changes and there’s fewer and fewer existing homes, then all the homebuilders start cranking up.”

In the next 90 days, a builder who had been offering one “spec house” – real estate developed before it has been sold – could increase his offerings to three or four, Sanford said, because bankers will ease up on financing once they know there’s less competition from existing homes.

The median price of homes sold in April also shrank a little, falling from $139,000 in April 2011 to $135,950 last month. But Sanford noted the sinking home price could also be tied to the small percentage of costlier new homes for sale. As existing homes and foreclosures are snatched up, he said, that median price should increase.

With a regional economy that is more robust than many other areas of the state and nation, more people are continuing to move to the Austin-San Marcos area. Or they’re looking to jump from an apartment lease to homeownership, he said.

“Existing home sales have been recovering if you look at statistics over a yearlong period, but it’s been slow,” he said. “It’s slow and steady in the correct direction, but over time the total number of houses on the market starts to shrink as the economy gets healthier.”

Real-estate agents sold 82 homes in the Kyle-Buda area in April, compared to 65 in March and 81 in April 2011.