Healthiest Housing Markets 2009: Fall Update

#2 San Antonio, Texas
Market Health Indicator: 41.2

The recession arrived in San Antonio earlier this year, when employment finally turned negative due to weakness in the manufacturing sector. But with military bases as three of its top four employers, this Texas city may see better employment numbers next year, potentially fueling housing growth.

Housing here remains affordable at a median of $148,000, with prices declining a mere 1.6% during 2009. In addition, San Antonio routinely ranks among the best cities for relocation, and has been gaining population at a rate of 2.8% annually, a trend that continued even this year.

Despite favorable trends, though, San Antonio housing permits have fallen 54% so far this year, and comparisons may wind up even lower before the year is over. A full 72%of the action is in single-family rather than multifamily permits.

Courtesy: Hanley Wood Market Intelligence.

2009 Builder's Showcase Expo

Come visit Elegance in Design at the 2009 Builder's Showcase Expo.

This year we have decided to take a room that is commonly overlooked and unappreciated - the Utility Room - and added multiple vignettes so that consumers can see the myriad of opportunities available to them.

We have a canning/preserving area, a pet grooming area, a sewing/craft area, a lighting lab demonstrating the very latest in LED lighting, cold storage, and so much more.

Come join us May 25-27th from 10 am to 8 pm. See you there!

Lowball Appraisals Spark Uproar

In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision at prices ranging from $340,000 to $350,000. But recently there’s been a major hitch as appraisers assigned by banks are coming in with valuations of $60,000 or more under Doyle’s selling prices. The appraisers, who Doyle says are inexperienced, unfamiliar with local market trends or both, are using distressed sales — foreclosures and short sales — as their “comparables.” Some of the distressed properties are in poor condition, and all of them offer fewer amenities, Doyle says.

In the suburbs near Cleveland, Enzo Perfetto, manager of Enzoco Homes, builds custom houses on clients’ lots. Recently, he said, banks have begun assigning appraisers from far outside the area to value lots as part of mortgage packages on new homes. Some of the comparables they use are in foreclosure situations, and that depresses land valuations. A young couple who paid $75,000 for their lot recently had it valued at just $30,000 by an out-of-area appraiser who looked only at online data, according to Perfetto — discouraging the couple from proceeding. “I think the pendulum is swinging way too far in the wrong direction on appraisals,” Perfetto said. Bank-assigned appraisers often “don’t know the local market and they’re going for low numbers to be ‘safe.’” (www.washingtonpost.com)
Washington Post (7/4/09); Kenneth R. Harney

San Antonio Continues to Thrive

1. San Antonio had the 5th largest population growth in the country, adding 25,642 people in the past 12 months. That was 1.9% growth. (source: Express News)

2. Medtronic will create more thatn 1,400 jobs in its new Diabetes Therapy Management Center in San Antonio. We currently have 120,000 medical/biomedical jobs in San Antonio with a $16 billion payroll. (source: Express News)


3. Boeing Co. is going to hire 100 new employess to work Air Force planes at Kelly AFB. (source: SABJ)

Haas Residence

UNDER CONSTRUCTION
Quaint 3 BDR 3 Bth, Office, Game/Media Room, located in Laurel Canyon Ranch. Home will feature Cambria counter tops which is a natural quartz product that is environmentally safer than granite.

Big Boost in Housing Demand Expected From Echo Boomers

Depicting the current housing downturn in sobering terms, the 2009 "State of the Nation’s Housing" report released by Harvard University’s Joint Center for Housing Studies on June 22 nevertheless gives home builders firm assurances of a resurgence in demand once the echo-boom generation gains a footing in the housing market.

Born from 1981-2000, members of the echo-boom generation, Harvard says, will boost annual average household growth to more than 1.25 million during the decade of 2010-2020 — even under the worst of circumstances.

“While the economic crisis has dampened household growth, the sheer size of the echo-boom generation will give a powerful boost to long-run housing demand,” the report says.

Even under the weaker scenario, in which there would be 2.3 million fewer household formations in 2010-2020, average annual household growth can be expected to be comparable to the growth experienced from 1995-2005 as members of the echo-boom move into the prime household formation and home buying ages of 25 to 44.

“The number of echo boomers aged 25 to 44 will eclipse the number of baby boomers when they were those same ages by more than 5.9 million,” according to the report.

“With the number of households in this age group projected to increase between 2.0 million and 3.4 million, the demand for rentals and starter homes will surge,” the Joint Center says. “Meanwhile, with their longer life spans and sheer numbers relative to the preceding generation, the baby boomers will add dramatically to the number of households over 65. This will lift demand for retirement communities as well as services and home improvements that help seniors age in place.”

“With the echo baby boom driving demand for starter homes and apartments and the baby boom powering demand for homes suited to older Americans,” the design professions will be called upon to deploy new technologies and designs to meet the aesthetic tastes and functional needs of a new, more diverse younger generation on the one hand and a generation in need of home modifications to help them age more safely and healthfully in place on the other,” said Mohsen Mostafavi, dean of the Harvard University Graduate School of Design.

Garczynski said that the recovery is likely to be slow and spotty, beginning in places that did not experience unsustainable increases in housing production during the boom years. “Generally speaking, housing markets closer to the urban core and job centers could be on the leading edge of the recovery. Outlying rings of metropolitan areas will recover later once the inventory of unsold units declines to more normal levels.”

He also noted that demand for infill and higher density development could increase markedly in the period ahead. “This will require a spirit of cooperation between builders and the local officials who control the zoning and development process,” he said. “Hopefully, this will lead to greater acceptance of the smart growth principles NAHB has been advocating since the beginning of this decade.”

Study shows San Antonio is nation's best-performing city in recession

San Antonio has been ranked the strongest metropolitan area in the country for economic performance, according to a new report from the Brookings Institution.

The Washington, D.C.-based think tank has begun analyzing the impact of the recession throughout America’s metropolitan areas. In the first of a series of quarterly MetroMonitor reports, Brookings ranked San Antonio, Oklahoma City, Austin, Houston and Dallas as the top five metro areas in the country in economic performance in the wake of the recession.

Brookings ranked the top 100 metropolitan areas based on six key indicators — employment, unemployment rates, wages, gross metropolitan product, housing prices and foreclosure rates. This initial MetroMonitor report covers the first quarter of 2009.

The five worst metropolitan areas in the country impacted by the recession are Jacksonville, Fla.; Lakeland, Fla.; Tampa, Fla.; Bradenton, Fla.; and Detroit.

“All metropolitan areas are feeling the effects of this recession, but the distress is not shared equally,” says Alan Berube, research director of the Metropolitan Policy Program at Brookings and co-author of the report. “While some areas of the country have experienced only a shallow downturn, and may be emerging from the recession already, people living in metro areas that are now performing weakest economically should prepare themselves for a long recovery period.”

Howard Wial, director of the Metropolitan Economy Initiative at Brookings and another co-author of the report, argues that the report shows that a national fiscal and monetary policy will not be enough for stimulating the economy.

“Many (metro) areas will need targeted assistance, and since states have no funds available, the federal government will have to step up to fill the void.”

Concentrations of industry activity have both helped and hurts some regional economies during the recession. For example, metropolitan areas in states with specializations in energy and government employment — such as Texas, New Mexico, Oklahoma, Arkansas and Louisiana — have largely been insulated by the recession. However, metropolitan areas in states like Michigan and Ohio that depend heavily on the automotive industry have been impacted by the downturn in the economy, the report shows.

San Antonio is home to Randolph Air Force Base, Fort Sam Houston, Lackland Air Force Base and Brooks City-Base. The 2005 Base Realignment and Closure decision alone is providing a significant economic punch to the Alamo City’s economy through the consolidation of high-paying military health care jobs and more than $2 billion worth of new construction activity.

A separate report released by The DiLuzio Group LLC outlining the impact of BRAC showed that Fort Sam Houston alone would experience a 11,500 increase of personnel. The Army post will also gain 7.9 million square feet of space. Construction activity due to BRAC alone should create 46,000 construction jobs during the course of the building programs, the DiLuzio report showed.

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