S.A. Homebuilders Have 3rd Best Year on Record

As the housing market continues to contract, the builders seem to be taking the worst of it. KB Home, one of the country’s largest homebuilders, announced last week that it was shutting down operations in the Rio Grande Valley. According to an article in the Valley’s The Monitor, “Builders and real estate experts blame the decline on the nationwide foreclosure crisis sparked by subprime lending. Amid the subprime problems, lenders are tightening mortgage requirements and loans have gotten more expensive, resulting in lower demand for new homes. ”

So how is the new home market in San Antonio. The answer: still good, just not great anymore. Read this article in the San Antonio Express News, and you will learn that while new home sales were down over 25% in 2007 from 2006, that 2007 was still the 3rd best year for San Antonio homebuilders.

And what did that mean for new home buyers: BIG INCENTIVES. Builders offered to pay buyer’s closing cost’s, free upgrades, and huge discounts. So the question is what is in store for 2008? We have no crystal ball, but all indications are a little more of the same until the market corrects itself. Builders still have excess inventory, which they should be able to bring down by summer.

So if you have been thinking about purchasing a new home in San Antonio, you still have a few months where the builders want to really earn your business with still historically low interest rates.