[Highlights and emphasis added]

The Austin-area housing market took a big hit last year, and more pain is in store for 2009.

That was the message delivered to about 600 homebuilders, real estate agents and small-business owners whose companies depend on the housing industry at the Austin Economic Housing Forecast on Tuesday.

"Things are probably going to get a little bit tougher before they get better," said Eldon Rude, Austin director of Metrostudy, a market research firm, and a panelist at the event, presented by the Home Builders Association of Greater Austin and the Austin Board of Realtors.

Austin-area builders started construction on slightly more than 8,000 houses last year, according to Metro-study, the lowest number since 1997.

Rude predicted that home starts will plunge by another 25 percent this year to about 6,000. That would be down 63 percent from the peak in 2006.

He said that home prices also will continue to decline, but he would not predict by how much.

"My expectation is that we will continue to see a decline in pricing through 2009," Rude said.

Austin's housing market remains healthier than many across the country, but tighter lending requirements, eroding consumer confidence and slowing job growth have sharply curtailed Central Texas home sales after several record years.

Sales of existing homes in Central Texas plunged 40 percent in November, the largest decline on record, as the recession and credit crunch arrived in Austin.

The 990 sales were the lowest number for November since 1997, according to the Austin Board of Realtors, and the median price fell 3 percent, the first drop in four years.

Austin's economy also continues to outperform most areas of the country, but the number of jobs in Central Texas grew by 2.2 percent in 2008, about half the growth rate experienced in 2006 and 2007.

Economist Jon Hockenyos, another panelist at the event, predicted that the area will lose more jobs than it creates in 2009, much as it did in the tech-bust years of 2002 and 2003.

"We're at the tail end of a period of rapid expansion," he said. "2008 was pretty tough. 2009 will be tough as well."

Kate Miller Morton, American-Statesman Staff (kmorton@statesman.com; 512-445-3641 )
01/07/2009

Source: http://www.statesman.com/business/content/business/stories/realestate/01/07/0107housing.html

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