Austin Housing Market Slows as New Permits Drop to 4-Year Low:

Weakness in residential market will be predicted for 2008 during the 13th Annual Economic & Technology Forecast Event

AUSTIN, Texas, January 2, 2008

After several years of strong residential construction growth and rapidly rising prices and home sales in the Austin region, the residential real estate market in Austin returned to more sustainable levels in 2007. Largely driven by emerging problems in the national subprime mortgage sector, the slower residential real estate market nevertheless produced Austin’s second-highest number of home sales ever, just below 2006’s record year. New home construction, however, has slowed significantly. Presentation of these facts among other economic indicators for the Austin region will be made at the 13th Annual Economic & Technology Forecast event to be held on January 24, 2008.

Austin’s Housing Market Slows. As fewer people have been able to afford houses due to increased lending restrictions, housing permits have dropped precipitously, with 38.1% fewer housing permits issued in 2007. Housing permits dropped from 17,531 permits issued in 2006 to an estimated 10,846 permits issued in 2007. Over the long term, Austin builders have been issued approximately 20 housing permits for every increase of 100 in the regional population. Since 2001, however, Austin builders have exceeded long-term averages in this key ratio, peaking at 35 housing permits per 100 growth in population in 2005.

Continued population and job growth in 2008 will cushion Austin’s housing market from the worst effects of the subprime mortgage crisis. Continued housing price increases, especially at the rate of 7% annually seen from 2004-2007, may be slowed to the average growth of 4-5% historically seen from 1988-2004. Apartment vacancy rates, typically seen as a leading indicator for decreased home sales, are down to a five-year low, indicating that lower-end and first-time homebuyers have been priced out of the market or do not have sufficient credit to qualify for new, stricter requirements.

About the Economic & Technology Forecast event. More information about the Austin housing market and other economic indicators will be presented during the 13th Annual Economic & Technology Forecast on January 24, 2008 at the Austin Convention Center. The annual event is the largest business event in Austin, Texas, attended by more than 1,000 professionals each year. The audience includes public officials, educators, media, economic analysts and business executives from Central Texas’ technology, legal, financial real estate and services industries. More information including tickets available for purchase can be found by clicking this link.

This year’s guest speaker is The Economist’s U.S. Economics Editor, Zanny Minton Beddoes. Ms. Beddoes will also discuss economic predictors and the impacts on a national and global scale.