Austin Housing Market Still Going Strong but Rapidly Rising Prices is Starting to Slow Momentum

Posted in Austin Market | Posted on 10-29-2014 | Written by Metrostudy News

Austin, TX – October 2014: Metrostudy, a housing information and consulting firm, reported today that their quarterly survey of the Austin market revealed a 17% increase in new home starts compared to 3Q-13.  Metrostudy’s survey recorded 3,123 new detached home starts in the third quarter of 2014, a 17% increase from 3Q-13’s total. Austin builders started 10,205 new homes in the last twelve months, representing a 9% increase year-over-year.  Area builders closed 2,454 new homes in the third quarter, 2% more than the third quarter of 2013.  Over the last four quarters, builders have closed 9,307 new homes, a 9% increase over the prior four quarters.

“The Austin market has experienced a strong year thus far but momentum has started to slow as builders and home buyers are starting to feel the pinch of higher costs and home prices.” said Randall Allsup Regional Director of Metrostudy’s Austin market.  “Demand for new homes remains strong, especially in areas that can produce entry level product priced below $200,000. In order to meet the demand of today’s buyer, the market continues to move into new submarkets and is introducing new product offerings.”

“Lot inventory remains a hot topic as lot supply remains tight in the most active sub-markets around Austin. Facing labor shortages and swamped municipalities Austin developers have delivered 10,106 lots in the past twelve months which is just short of keeping pace with a market that has absorbed 10,205 vacant lots that time. Developers are doing all they can to deliver lots to a market that is desperate for them.” says Allsup. The 2,810 lots delivered in the 3rd quarter is the third quarter in a row in which there have been more than 2,500 lots delivered in a single quarter, but despite this surge in development activity the total lot supply has shrunk to 14,414, down 2.5% compared to the 2nd quarter.  With regards to supply and demand, the relative lot supply in Austin is now 16.9 months, well below the 20 months considered equilibrium in the Austin market.  “The lot shortage and rapid cost and home price increases go hand-in-hand,” adds Allsup “and unless there is consistent quarter-over-quarter and year-over-year lot delivery exceeding lot absorption there will be little relief to be found bar another economic downturn.”

With rapidly rising prices in what is considered a hot market, Metrostudy is keeping a close eye on housing inventory levels as this has historically been a very good indicator of the health of the market. As of the 3rd quarter there are 1,285 finished vacant units in the Austin market, up 9% compared to one year ago. Though up from last year, this finished inventory equates to a 1.7 months of supply, which indicates a sellers’ market. The number of new homes under construction rose 20% compared to a year ago and the 3,922 homes under construction is the highest total we have seen since the peak of the market in 2006. The number of new homes under construction can either be an early indicator of future closings, but also may harbor higher levels of inventory and a softer market. Time will tell whether this indicator is a positive or a negative.

Concludes Allsup, “The fundamentals of housing demand, primarily job and population growth, remain strong. Yet in the face of rapidly rising prices, tight lot availability, and increased competition many of our builder clients are feeling squeezed in a market which by all accounts is a healthy one.”

For information contact:
Randall Allsup @ 512.473.2250 or 210.383.9696
E-mail: rallsup@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Three important takeaways from ULI Fall Meeting

Posted in National Housing Market | Posted on 10-21-2014 | Written by Metrostudy News

brad hMetrostudy’s Brad Hunter will be attending the ULI Fall Meeting and here are 3 important takeaways he thinks every attendee should take note of!

1) Housing starts are only going to be up 2% or so for 2014. Is 2015 the year that housing “starts” will take off?

2) How will “denser suburbs” help to address the needs of home buyers in the next three years?

3) Will mortgage availability increase anytime soon?

Follow @BradleyHunter on Twitter to hear more from the meeting and remember to #ULINYC!

10/21/2014: 2014 ULI Fall Meeting

Posted in Events, National Housing Market | Posted on 10-21-2014 | Written by Metrostudy News

Schedule at a Glance

Top 4 Obstacles and Boosters for New Home Construction

Posted in National Housing Market | Posted on 10-17-2014 | Written by Brad Hunter

brad hHousing starts rose by 6.3% in September, which places activity 17.8% above September of last year, according to the government report just released at 8:30.

Read full article on Builder

Top five things to learn at the Land and Homebuilding Conference.

Posted in National Housing Market | Posted on 10-06-2014 | Written by Metrostudy News

brad h - With land and lot prices having shot up,  are there any bargains left, and where should you look for them?

- What are the risks that the large builders will overdo it again this time around?   How can one protect oneself from the damage?

- How can the market due diligence process be sped up?

- Now that some buyers are falling off of land deals, what is the opportunity to “swoop in.”

- How will the inevitable builder “margin squeeze” affect land-buying behavior, and private equity returns?

Catch Metrostudy’s Chief Economist, Brad Hunter’s on October 7th at 8:45 AM and 12:30 PM

8:45 AM - Market Update… Where are we in the Homebuilding Cycle? 

12:30 PM - Feasibility Studies & the True Cost of Land Development

 

Six Takes on Housing from Metrostudy

Posted in National Housing Market | Posted on 09-29-2014 | Written by Metrostudy News

Everybody wants a piece of Brad Hunter’s housing expertise these days!

brad hChief economist Brad Hunter opined on buyers, sellers, hot markets, and the overall temperature of the housing market in six media interviews this past week.

Click Here to See All Interviews

Rio Grande Valley Housing: Metrostudy 2Q14 Survey Results

Posted in Rio Grande Valley Market | Posted on 09-25-2014 | Written by Metrostudy News

Metrostudy’s 2Q14 survey of the Rio Grande Valley housing market shows that the region continues to lag behind the rest of the state in terms of economic and housing activity.  The annual rate of new home construction in the Rio Grande Valley in 2Q14 is 1,850 starts, up 12%, from 2Q13.  The Rio Grande Valley had 430 starts in the 2nd quarter, up 18% over 2Q13.  The number of new home closings in the year ending 2Q14 was 1,874, up 190 units, or 11.3%, over the 2Q13 rate of 1,684. There were 470 closings in the 2nd quarter, up 39% over 2Q13.

It is worth noting that the top 58 subdivisions ranked by annual starts [in this group a minimum of 9 starts] garnered a 54% share of the 2Q14 annual rate of 1,850. The remaining 387 subdivisions generate the other 46% share of annual starts. In that regard, there were 280 subdivisions that had fewer than 4 starts, including 129 that showed no starts over the past year.

Even as the RGV continues to lag the growth in the state as a whole, the analysis shows that there has been steady growth, a much needed improvement over the last few years, just not extraordinary. Inventories are improving, prices are rising, and there is a good pocket of construction in the most active subdivision group.  For the near future, when observing the RGV housing market, the overall analysis will look somewhat mediocre while at the same time there will be a core group that generates more than 50% of all new home construction, holding tighter inventories and exhibiting better trends.

“There are still issues with excess housing inventories in both the new home and resale markets, in addition to the foreclosures that continue to dot the landscape,” said Inselmann. “Real recovery doesn’t expose itself until inventories are brought back in line with demand, and that still remains somewhere down the line. If recent history is the indicator, the future will be slow and methodical improving a little bit at a time, which at least is a good direction to be moving in.”

For information contact: jack inselmann @ 210.710.3635
Email jacki@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

 

New Subdivisions in the Midwest?

Posted in Chicago Market, Indianapolis Market, Twin Cities Market | Posted on 09-25-2014 | Written by Chris Huecksteadt

 

chris h for newsletter onlyA sure sign of a recovering housing market?  How about new lot development occurring for the first time in several years!  Surveying the Chicago, Indianapolis, and Minneapolis/St. Paul markets Metrostudy has noticed that new subdivisions are beginning to come through the pipeline.  Not a re-hashing of existing communities or a re-configuring of existing developments, but new land, being newly developed.  In 2010, in the Chicago market, there were a total of 383 new lots delivered.  Three HUNDRED and eighty three!!!  There are nearly ten million people living in this market and Chicago could only muster a few hundred new home sites during a 12-month period, a mere 30 new lots coming on line per month.  Through the first six months of 2014, there were a total of nearly 1,500 new lots delivered.  Not only that, but we are beginning to see proposals for new subdivisions that didn’t exist just a few years ago.  That may not seem like much in some markets, but here in the midwest, developers have been in hibernation for the better part of the past five years.  Development activity has not been as scarce in Indianapolis and the Twin Cities as it has been in Chicago, but nearly so.  In the Twin Cities, for example, a total of 964 new lots were delivered in 2010.  In 2013, there were 3,683 new lot deliveries.  Indianapolis has seen a total of 1,400 new lots delivered in the first six months of 2014, compared to just 650 through the first half of 2010.  As midwest markets have slowly recovered, builders and developers have recognized the need for fresh lot inventory.  Quality A and B lots are nearing critical levels of remaining inventory, fewer than 18 months of supply in all three markets.  Given the length of time necessary to bring new lots to the market, developers have been very busy over the past twelve-months in an attempt to keep the housing industry supplied with lots in the most desirable locations.  Look for continued new lot development activity in these markets for the next few years as we play catch-up in order to resupply these markets.

chris h

 

 

 

New Single-Family Home sales up in August , but not in every market

Posted in National Housing Market | Posted on 09-24-2014 | Written by Metrostudy News

 

brad hSales of new single-family houses in August 2014 were at a seasonally adjusted annual rate of 504,000, up by a startling 18%.   This is according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. 

Read Full Article Here

Also see Brad Hunter’s interview on CNBC discussing data from today’s housing report and he explains why the Western housing market is so hot!

Metrostudy’s Top 15 Markets as measured by change in move-ins

Posted in National Housing Market | Posted on 09-18-2014 | Written by Metrostudy News

Metrostudy does a 100% count within markets across the country of move-ins into newly-built homes.  This is a powerful and reliable measure of end-user demand.  The top two markets have outsized percentage changes because they are starting from a low base number.  In terms of the large markets, Central Florida has seen a 24.3% increase in new home demand in the past year, and Charlotte, NC, has seen a 23.4%.  Atlanta, which was savaged by the downturn, has seen a 22.9% increase.  New home construction is picking up in all of these markets, as builders scramble to meet increased demand.

august