(San Antonio, TX – Jan. 27, 2010) Metrostudy’s prediction that the San Antonio housing market would bottom out in 2009 proved correct, as both starts and closings appear to have reached a floor, said Jack Inselmann, vice president of the U.S. Central Division of Metrostudy, a national housing market research firm.

San Antonio builders started 1,642 single-family homes during the fourth quarter of 2009, a 0.2 percent decline compared to the fourth quarter of 2008. Closings surpassed starts, totaling 2,257, a 1.9 percent increase. Annual starts (7,135), declined 18 percent and annual closings (8,329), declined 25 percent year over year.

At the end of the fourth quarter, total housing inventory dropped to the lowest level in the current cycle. There were a total of 3,982 homes in inventory, including models, finished vacant homes and homes under construction, a 5.7-month supply. Metrostudy documented 1,991 homes under construction at the end of the fourth quarter of 2009, 651 fewer units than in the third quarter of 2009, Inselmann said.

San Antonio builders have successfully reduced their supply of finished vacant homes. Finished vacant inventory totaled 1,536 units at the end of the fourth quarter of 2009, which is 64 units more than the third-quarter total of 1,472 units, and 668 fewer units than at the end of 2008, when there were 2,204.

Metrostudy considers the months of supply of finished vacant homes a key indicator of the health of a housing market. When finished vacant inventory in the San Antonio market gets as high as 1.7 to 1.8 months, builders are forced to begin offering some concessions in order to move the inventory of unsold homes. Based on the closings rate for the last four quarters, finished vacant inventory represented 2.2 months of supply.

Finished vacant inventory in all price ranges decreased during the fourth quarter of 2008, and inventory levels in the $125,000 to $174,000 and $175,000 to $224,000 price ranges are now below two months. However, concerns remain about an oversupply of standing inventory, as the supply has remained above the equilibrium range for almost three years. Historically, increased levels of home sales precede rises in employment and consumer confidence, as low mortgage rates and enhanced affordability help tap pent-up demand, Inselmann said. National and local housing markets continue to contend with a weak economy, a poor job market, foreclosures, fears of lowered home values and tight credit conditions. The new homebuyer tax credit, extended through the spring, has generated some demand; yet this perhaps foreshadows a weaker fall season, as demand has been stolen from the future, Inselmann said.

“San Antonio appears to be poised for a stronger recovery relative to other markets. Job growth is the key to any economic revival. With hiring announcements from such companies as Caterpillar, Rackspace, USAA, Nationwide, and Transcom, and the continuation of the Department of Defense Base Realignment and Closure Commission (BRAC) program and expansion of Fort Sam and other military installations, San Antonio is poised for growth,” Inselmann said.

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data collected by a staff of 650, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

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