The recent market for new homes in the United States as a whole has taken a hit, and the Texas market is following suit. Accourding to an article in the Austin-American Statesman on October 7th written by Shonda Novak and M.B. Toboada, while homes available for sale across Central Texas were at a four year high this August, sales were down 10 percent.
To me, the solution seems pretty simple. Build less houses, fewer houses sit around without a family. Not so fast, my friend. Apparently, builders have decided to cut back on a miniscule basis. All this has done is keep inventory low and prices up. According to a Texas A&M study, the Texas new home industry will continue on a decline until houses start going up at a much slower rate. So in a way, my theory is correct. However, home builders and building companies need to cut back dramatically instead of microscopically.
Not only are individual home owners/ potential sellers hurting, but big business builders are feeling the pain as well. Subdivisions are coming to a complete halt. Prices are not expected to ease up any time soon either, with prices forecasted to rise in 2008 as well.
Hopefully, home builders will heed warnings and stop building new houses at such a high rate. However, for people worried about the rising prices of a new home, according to Michelle Perris, the broker/owner of Michelle Perris Real Estate, "The sky is not falling, not at all. I think that people will get over the national news, and they're going to be fine." If a potential home buyer or seller believes this, though, i believe they are in for a rude awakening.
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