Austin has best housing market in U.S.

AUSTIN (KXAN) - A homebuilding industry online magazine has ranked Austin the nation's healthiest housing market. Builder Online cites low unemployment and high demand as reasons why the Austin market is making a comeback.

Home prices in Austin were still going up last year, unlike most of the country, but they have finally started to fall. The latest numbers show home prices down 4.6% in 2009.

"Clearly we're not as good as we'd like, obviously we'd like for things to be better but still it gives you some feeling of assurance that things aren't as bad as some people are having," said Harry Savio with the Greater Austin Homebuilders Association.

Builder Online notes that Austin's population grew by more than 4% during the first half of this year which created demand and will help to firm up home prices.

"The fundamentals are there for housing to continue to grow," said Savio. "We don't have a lot of inventory, we don't have a lot of excess houses on the ground."

Savio said builders are also seeing a boom in large part due to the federal government's $9,000 tax credit for first time homebuyers.

"A lot of first time homebuyers are going out and looking at houses and realizing, if I'm going to buy a house this is probably a good time to do it," said Savio.

The credit expires November 30th, but housing industry experts in Austin don't expect a cash-for-clunkers style decline in home sales.

"You worry about that but the good news in the article is that there are some fundamental things about the economy- the Austin economy that is sound," said Savio.

Two other Texas cities ranked in the top ten. San Antonio finished just behind Austin at number two. And the Houston-Sugar Land area ranked number four.