Healthy year ahead for housing market

Austin Business Journal - 10:27 AM CST Tuesday

The Austin area's new-home market will experience another strong year in 2006, according to a new market study.

Metrostudy Corp., a Houston-based consulting firm that tracks housing statistics nationwide, says 14,750 to 15,750 new units will be added to the Austin market in the coming year.

"This level of activity should keep anyone involved in our industry very busy this year," says Eldon Rude, Austin director of Metrostudy.

2006 should see continued strong housing demand in the Austin market, especially through the first half of the year, Rude says.

With housing prices expected to climb throughout the year, a key question will be whether income levels can keep pace with the price of housing in the region. This question mark, in combination with rising interest rates and the associated market cycle fatigue, might mean a moderate dip in demand before the market regains momentum in 2007.

The annual rate of new-home starts in the Austin region reached nearly 15,500 units in 2005, another record for the area, and the fourth consecutive year the annual starts rate has increased, Rude says. Consistent with the past four years, the demand for new homes has been strongest in the lowest price ranges -- those catering to entry-level buyers and families with low to moderate incomes.

However, housing demand has been strong across all price ranges, with all price levels experiencing increases in sales, even in the high-end segments.

Rude says Austin is one of the more competitive home markets in the country, leading to thin builder margins despite strong demand.

"The larger public builders continued to pursue additional unit and revenue volume at the risk of lower profits through the end of 2005," Rude says.

"We will have to wait to see whether such strategies persist into 2006 or whether builders accept lower volumes and attempt to raise prices in the spring season. Materials, labor and land and lot prices increased in 2005, and will continue to increase in 2006, intensifying the cost pressure builders face."

The level of active listings, or homes on the market, in Austin dropped to a 3.5-month supply in December 2005 -- a level of inventory that's low enough to push home prices higher, but not so high as to result in significant price appreciation in the near term.

In the past year, existing-home prices in Austin have risen nearly 6 percent after four consecutive years of minimal price gains.

"Clearly, it is difficult to make a case for a housing price bubble in Austin or anyplace else in Texas, for that matter," Rude says.

COLD HEARTS OF TEXAS?

Jan. 12, 2006, 1:47AM

Houston ranked 'mean' to homeless
Two groups cite laws they say criminalize people living on streets
By MIKE SNYDER
Copyright 2006 Houston Chronicle

Houston ranked seventh on a list released Wednesday of 20 U.S. cities with particularly harsh measures that criminalize sleeping in public, begging or other behavior associated with homeless people.

In including Houston on the "meanest cities" list for the first time in the four years it has been compiled, leaders of two national homeless-advocacy organizations cited other neighborhoods' efforts to be added to the areas covered under a city ordinance that makes it illegal to lie, sit or place belongings on downtown or Midtown sidewalks from 7 a.m. to 11 p.m.

The report's authors also cited rules the city adopted in April that prohibit people with "offensive bodily hygiene" from using public libraries. Advocates for the homeless say the rules, which also forbid sleeping on tables or using restrooms for bathing, obviously target homeless people.

The National Coalition for the Homeless and the National Law Center on Homelessness and Poverty said such measures are growing more common across the country even as urban homelessness worsens.

"A war on the homeless is being waged in downtown America," said Michael Stoops, acting executive director of the national coalition.

"The criminalization of homelessness is a burning civil rights issue for this decade."

Several homeless people in areas affected by Houston's ordinance said enforcement has been particularly intense recently under the eastern portion of the Pierce Elevated.

The western portions were fenced off last year to provide parking for Metropolitan Transit Authority employees.

"They woke us up one afternoon because the sleeping bag was 1 inch over the sidewalk," said Kris Kirchner, 48, who said she's been living on the streets intermittently for years.

Such efforts, Kirchner said, seem intended to keep homeless people out of downtown, "but I want to know how you make 6,000 people disappear."

Leaders of local groups that serve the homeless said homeless people often move to adjacent neighborhoods in response to police enforcement efforts. Mayor Bill White said he is inclined to agree.

"These ordinances are limited and not effective in dealing with the issue because they focus on moving people around rather than solving the problem," said White, adding that he had supported the 2004 extension of Houston's ordinance to Midtown because of the "overwhelming support" from residents there.

The ordinance applied only to downtown when it was adopted in 2002.

Two years later, leaders of rapidly developing Midtown successfully petitioned for inclusion. The city secretary's office is reviewing similar petitions submitted by three other neighborhoods, including two in the Montrose area, said Dale Harger, the president of the Avondale Association in Montrose.

Harger said an overwhelming majority of the neighborhood's residents and property owners support the extension of the ordinance to Avondale.

Harger and other neighborhood activists say well-intentioned programs offered by churches and charities offer food or showers without helping the homeless find temporary shelter or permanent housing.

"There are some organizations in the neighborhood that artificially attract and concentrate the young homeless crowd, which draws the wolves and the predators," Harger said. "They are hurting the people they're trying to help."

The homeless-advocacy groups said the concerns that often motivate such laws are valid, but they said approaches other than criminalization are more effective and humane.

In Broward County, Fla., a nonprofit agency has partnered with police to create outreach teams that, in five years, have placed more than 11,000 people in shelters while arrests of homeless people have declined.