At a time when many people still feel that the Austin real estate market is soft, one builder sees opportunity. Unlike most area builders, who are starting very few speculative homes, D.R. Horton is putting up hundreds of new homes in the Austin area. Most homes will be priced under $200,000 and there is a good reason for this.
The First Time Home Buyer tax credit has had the $200,000 and under price range moving really well in the Austin area. Part of the effect is seeing a reduction in new homes in this price range. With few builders building and supply dropping, Horton seems to be gambling that inventory will continue to decrease.
Even though the market in Austin has slowed, it is still much better than most cities across the country. Even without significant job growth, people continue to relocate to Austin and any of these people are home buyers. People move to Austin for a lot of reasons, with one being the area’s natural beauty.
Horton is probably also taking advantage of how conservative people have become when it comes to spending money. With the national economy in the state that it is, people have reduced spending and this includes purchasing smaller and less expensive homes.
With a drop of almost 63% in new home starts in the Austin area compared to the peak in 2006, Horton’s bet is likely to pay off.
Sam Chapman is an