By Don Bolding
The Cove Herald
A closer look at the homebuilding and realty businesses in the wake of the elation over the success of the Central Texas Homebuilders Association's Parade of Homes reveals an improving but cautious market, looking forward with guarded optimism but no more pedal-to-the-metal projects that have marked it in recent years.
At least not for locally-based builders who have to count on selling quickly to pay off loans. Big builders such as D.R. Horton and Centex Homes are still building large numbers of houses on speculation and accepting the risk.
"Our houses are still selling. We're not in a recession, by any means," said Terry Neiman of Neiman Homes and Construction in Copperas Cove, "but I guess the word 'spotty' is the best one to describe how things are going. Everyone is cautious because they see gas prices and all other prices rising, we don't know how the election will turn out – there's just a lot of uncertainty right now. But I'm building three custom houses and three more on speculation now, I'm busy all the time, and I'm not worried. And I think I'm typical."
Neiman is the recently-named public-relations chairman for the CTHBA.
The annual Parade of Homes earlier this month was an encouragement. Participating builders only featured 20 homes, compared with 27 the year before, and members were gloomy about prospects because the slow growth of 2007 didn't seem to have lifted. But association president Carol Bass of B&B Builders in Belton said the number of visitors exceeded last year's parade by about 10 percent, and a substantial number were interested in buying. She herself sold a $400,000 house in Bella Charca, a gated community in Nolanville.
She said at the time that builders were hoping the response was a sign of the end of the slump. It seems to have been a sign to warrant optimism, but the recovery has been less than meteoric. If the doldrums of 2007 were caused partly by the absence of 13,000 troops on deployment, now prospective buyers face a tightened market where people who get conventional loans have to put some money down, and fewer people than before are qualifying as the government seeks to heal the wounds of the subprime, adjustable-rate mortgage debacle that has caused an avalanche of foreclosures where the practices were rampant.
"We see buyer interest holding up, though," she said. "A few other builders have reported some sales. The interest rate has dropped a little more, encouraging people who want nicer houses. It's nothing spectacular, but we're encouraged."
Jack Smith of Donlie McMullin Real Estate Services in Cove, who Neiman said assists a lot with research, said new home inventories – houses built and awaiting sale – are down to about 8.5 months after starting the year at 9 to 10 months. The measure is the average of the time it takes to sell a house.
Figures supplied by Jose Segarra, public information chairman of the Fort Hood Area Association of Realtors, show 1,006 single-family homes sold in the association's area from January through April of this year, compared with 962 in the same period last year. The combined value of the homes last year was $113.6 million, compared with $125.1 million this year.
The average price for the period last year was $118,138, compared with $124,402 this year. Average days on the market last year were 116, compared with 113 this year.
"Prices are going up, just like the prices of everything else, but values are holding steady, and we're still at the top of affordability in the nation," he said. He thinks a recovery is under way, but he agrees with the reluctance of others to build too many houses on speculation because too much inventory would be a liability for prices.
While all the attention in Harker Heights is on Market Heights and other commercial construction nearby, homebuilding continues farther east near Farm Road 2410 toward Stillhouse Hollow Lake. Heights chamber of commerce president Bill Kozlik is less than happy about the 5 to 10 percent growth rate there but notes that homes are still being built and sold. Most new houses there are in the $180,000-$230,000 range, and they sell to retirees and commuters from Round Rock and other communities to the south.
"Growth may be slow, but it's better this way than to have a lot of houses on the ground with no one to occupy them," he said. He noted that sales have been excellent for higher-priced homes at high elevations overlooking the lake.
Cove chamber of commerce president Marty Smith said, "I've been getting calls from people all over the country looking to retire into good weather and a good cost of living." Construction there is mostly to the north of town, the city's most opportune direction for growth, but she said more building can be expected to the south when a reliever route around the town is completed there.
"We desperately need that," she said. "If we don't get it, commercial building will be smaller and we'll be much more constrained." In the meantime, she said most Realtors she has talked to say that sales are increasing.
She said the recent Rabbit Fest, one of the town's annual tourist draws, was "a surprising success. We got fewer people, as we expected, because fewer are driving. But they still spent money."
Lots of professionals seemed to be "surprised" when things worked well, but the surprises are surprisingly common. And the market is entering summer, when spikes in home sales are usual. Neiman believes the local market got "spoiled" be a long boom that probably had to come to an end somehow, but a new equilibrium, better than expected, might be around the corner.
Contact Don Bolding at email@example.com or call (254) 501-7557.