Mike Inselmann, president of Houston-based housing research firm Metrostudy, says Texas markets are still doing a lot better than most of the country. But when final numbers for 2007 come out, they will show housing starts down 25 percent or more from 2006. However, he says closings are not off as much.

"We're eating into inventories," he remarks. When we look at the inventory levels of new and existing homes for sale in Texas, we see a picture Florida builders would love. But the downturn there — and the discouraging news from other parts of the country — is shaking the confidence of Texas consumers and builders alike. It shouldn't be happening.

The Texas economy is riding the crest of rising oil prices. Housing is still affordable for working families. Home prices are stable or even rising slightly. If mortgage lenders get back to reasonable underwriting standards and create some loan instruments that serve the market segment that used to depend on FHA/VA mortgages, Texas will be fine this year. These will always be skinny margin markets, but Texas builders are used to that!

The Drees Co. President David Drees says he's keeping his fingers crossed for a mid-year turnaround in home sales in his Mid-west markets (especially Cincinnati and Indianapolis), as well as Washington, D.C. Meanwhile, Drees is doing reasonably well in Nashville, Raleigh and the Texas markets. "We're selling houses in Texas," he says, "but not making much money. Margins have always been tight there, and it's even worse now because the public builders are discounting houses to move inventory."

Pulte Homes' much admired Pultrim integrated exterior trim system is now available to other builders. Pulte recently announced it has licensed Tecton Products — a Fargo, N.D., manufacturer of pultruded fiberglass products — to market and sell the Pultrim system. The system, brainchild of Pulte Chairman Bill Pulte, minimizes parts and allows for quick installation of cornice, fascia, frieze and gutter components. The low-maintenance system seems likely to be a hit with other production builders because it has great curb appeal and offers the prospect of reducing warranty costs. It will be marketed as Tecton Architectural Trim.