Is Houston Overbuilding?
This RisMedia article reports University of Houston economics professor Barton Smith is worried about the housing market. "Ominous signs are looming, Smith said. Foreclosures, for example, are as high today as they were in 1991. And builders in Houston are putting up single-family homes faster than they can be sold."
"In the past year, 42,000 single-family home permits were issued, but the area gained only 15,000 households."
"Developers have been focusing lately on starter homes. But that will be the weakest part of the market because those lower-priced homes are most sensitive to interest rate hikes. Not only are developers overbuilding, but they are building the wrong houses. When the economy improves and people start moving to Houston with money from selling their costly houses on the West or East coasts, they'll be looking for upscale properties, not starter homes, Smith said."