Don’t you just love a poorly researched article on a Sunday morning? It is the weekend, after all. Who wants to clutter up the day with facts? I ran across one this morning–a classic case of “reporting via press release”. If the reporter had done even the most rudimentary of Google searches, it would have been apparent that there are holes in this story. The story is from Reuters and deals with a development here in Austin:
[T]here still are still prime areas, such as Austin, Texas, where there is life in the move-up market for current homeowners.
Wheelock Street Capital, a real estate private equity firm founded in 2008, told Reuters exclusively it bought The Canyons of Sweetwater, a stalled 1,600-home development in one of the Austin area’s top-ranked school districts.
I live in this particular “top-ranked school district” and that development is down the road from me, so I can tell you that our local market here is on life support. One agent told me last year that there was an eight year supply of developed lots in the area, and I believe it. There are a lot of rumors surrounding this particular development. One that I can verify is that it has been a very long time in coming. [It’s also way out in the sticks.]
The article doesn’t just take the state of the Austin real estate market and this development at face value, it also [I suspect falsely.] leads the reader to believe that they have big builders ready to jump all over this land:
“To tell you who’s interested would be a kind of “Who’s Who” of public builders,” said Eldon Rude, who directs market research in Austin for real estate information company Metrostudy. “There are not many public builders in our region that wouldn’t be interested in building homes in Sweetwater.”
Builders such as Toll Brothers Inc, Lennar Corp and Meritage Homes Corp have used the housing market downturn in the last four years to buy land on the cheap. They also did their best to purge lots bought at peak prices during the boom.
The names of D.R. Horton and Pulte are also name-dropped later in the article, but close reading shows that the article says lots will be up for sale “in as soon as six months”. Builders might have expressed interest in this development, but they might well have said “Sure, we’ll take a look, but we aren’t paying much for lots these days”. Note we weren’t actually told who was interested, nor their level of interest.
Could Sweetwater surprise me and bring in some of the big homebuilders? Sure they could. There are a lot of developments out there at the moment that seem crazy to me, what’s one more nut in the cake? However, if you buy into the article’s headline, Exclusive: Homebuilders hover as Wheelock buys Austin land, there are agents out there who I’m sure would love to sell you a bridge in Brooklyn. The reality is that in Austin, like the rest of the country, sales are down, inventory is up, prices are down and things are rough- all facts the reporter should have checked rather than just presenting some press release as “news”.