Inland Empire positioned for explosive growth

Posted in Inland Empire Market, San Diego Market, Southern California Market | Posted on 07-25-2014 | Written by Steve Johnson

steve j Local and regional prognosticators are proclaiming the Inland Empire region (Riverside and San Bernardino counties) as positioned well to shortly regain it’s historical position as the leader of California’s new home production.  While often referred to as a bedroom community located east of Los Angeles and Orange counties, the Inland Empire is home to 4.2 million residents and the peak of the last cycle the region delivered a staggering 30,000 new homes per year. Land developers could not produce enough lot inventory fast enough.  It was a daily struggle to maintain a minimum supply to feed the housing demand. Read the rest of this entry »

New Home Sales Drops in June

Posted in National Housing Market | Posted on 07-24-2014 | Written by Brad Hunter

New home sales data from the Census Bureau showed a drop of 8.1% on a seasonally-adjusted basis.  The decline since the beginning of the year comes to 11%.

The northeastern U.S. markets slowed sharply.

In June, and so far in July, we are back to a situation where home shoppers are shopping but a relatively small proportion of them are actually buying.  This is explained in some cases by a long lead time (people taking longer to make a decision), and in other cases by a complete reluctance to buy.

Here is a look at the last year in New Home Sales by region showing sales have decreased slightly over the past few months.


In Southern California in particular, conversion rates are slipping, and traffic is still high.

According to our weekly data in Southern California, traffic is still running high relative to last year’s levels, but conversion rates are sub-par, and still slipping.

A related story is last week’s surprisingly weak read on housing starts.  The real explanation seems to have been lost in the shuffle: icy weather conditions in the Deep South last winter slowed the pace of development (paving, infrastructure), exacerbating the shortage of lots in places like Raleigh-Durham.

Despite low conversion rates nationwide, hot markets are keeping sales up in some states. The strong Texas markets and active adult magnets in Florida have pushed the two to the top of the list for new home sales in 2014. Here is a look at the year-to-date top 10 states.

new home salestop ten sts

Top 10 States for New Home Sales in 2014

  1. Texas: 33,177 closings
  2. Florida: 19,416 closings
  3. California: 14,280 closings
  4. North Carolina: 10,249 closings
  5. Georgia: 7,280 closings
  6. Colorado: 5,602 closings
  7. Washington: 5,337 closings
  8. Arizona: 5,309 closings
  9. Virginia: 4,836 closings
  10. South Carolina: 4,345 closings

A Tour of New Home Markets – by School District

Posted in National Housing Market, Philadelphia - Market | Posted on 07-24-2014 | Written by Quita Syhapanya

quitaMy first post titled “Tour of New Home Markets” we touched on the adventure my wife wanted us to go on driving new home subdivisions by school district. We also touched on the advancement in technology in the new home building industry and how a gut feeling can be validated or invalidated based the data at hand.

My wife’s goal was to find out why people are moving into specific school district areas. She considered high demand for homes (i.e. closings) to be a good indicator or preference for certain schools.  Her rationale is that builders wouldn’t be building these new homes in these areas if the schools were not good and if jobs are not there.

She has this infatuation about putting our daughter through a specific school district that she went to and graduated. From this spectrum she put together a list of the Top School Districts in the Philadelphia suburban counties (Chester, Delaware, Bucks, and Montgomery) from a new home building activity level as it relates to closings (move-in’s for the prior 3 quarters). Armed with Builder Insight on her iPad, my wife informed me that the school districts we should review on our tour from first to last. These school districts were not close to each other at all so we were on the road for a little while.

Below is the list of the Top 5 School Districts Based on Annual Closings.  

  1. Central Bucks West (Bucks County)

*Annual Closings: 258

  1. Downingtown Area School District (Chester County)

*Annual Closings: 210

  1. North Penn School District (Montgomery County)

*Annual Closings: 149

  1. Spring-Ford Area School District (Montgomery County)

*Annual Closings: 136

  1. Avon Grove School District (Chester County)

*Annual Closings: 121

*Three quarters of closings (observed move in’s) starting 3Q13 through 1Q14 from Metrostudy’s proprietary survey data.

After going through all the new home subdivisions in each school district I asked her which one she liked best. Her answer actually surprised me. She said she really liked the Western Montgomery Submarket; in particular the Spring-Ford Area School District. Her response was that she loved having easy access to Route 422 and it is not too far from the turnpike, Route 202, and Interstate 76. I was a little taken back since I was expecting another answer. I asked “you like it here because of access to Route 422 over the school district?” She said “No I love the school district, but it is a really awesome bonus to have Route 422 (which can be heavily congested if driven during rush hour) so I have a nice straight route for shopping!” You have Philadelphia Premium Outlets North West where she goes shopping for my daughter. Then a few miles South East you have the King of Prussia Mall where she goes shopping for herself. Right in the center of all that is where she wants to live. The big draw here is the Providence Town Center with all of its retail shops, dining, gym, and her favorite the Movie Tavern where you can have dinner and a movie at the same time. So the school district really was the most important piece to her decision. Having accessibility to all the amenities just helped make the decision a pretty easy one for her.

Once she identified the area she wanted to possibly move to in the future she quickly drew a polygon of her area of interest. She drew a polygon within Insight around the Route 422 Corridor and was able to find all the active subdivisions as well as potential land prospects as if we were builders. In her case looking for a future home to put my daughter into a school district that she desired. Also, all the shopping that she can afford or I can afford.

The school districts in the Top 5 above are good school districts and the amount of new home construction occurring in these areas are occurring for a reason. When looking at the school district before we looked at housing activity we both had our own reasoning as to which school district we liked best. It was all based on a “gut” feeling and reputation that school district had that influenced our feelings. Then we ran the data and toured the area. Our own targeted Top 5 school districts changed based on the data we pulled from Builder Insight. Then touring the areas and actually going to visiting some of the schools in the area allowed us to reconsider our rankings. So we went on “gut” first and went to the site to validate our feelings of the area. While our feelings weren’t outrageous, the effort made us reassess our pre-conceived rankings. We discovered a preference that didn’t exist previously. Now my wife is online looking at the school curriculum that each offered which is a whole other story.

In figure 3 below you can see the map layout of my wife’s drawn polygon with the accompanying subdivision name according to annual starts on the right hand pane. The green dots all represent land opportunities in the Route 422 Corridor.

Figure 3: Polygon of Route 422 Corridor in Montgomery County, PA


Builder Insight provides an intuitive map interface that knows exactly where you are with GPS (or FBI) like precision. It will provide instant access to potential land opportunities, evaluate activity levels, lot counts information, access builder/developer information, subdivision data, and much more.  Learn how you can use Builder Insight to get to know “new locations” in your market and get a sample of just one of our local market reports designed to get you the answers you need to make informed decisions.

The most important thing about the platform is how easy it is to use. I would never say that my wife is technologically challenged, but she is at times. Not saying that I am Mr. Technology or anything, but the ease of use that Builder Insight affords lowers the bar significantly in accessing answers to your questions.


A Tour of New Home Markets

Posted in National Housing Market, Philadelphia - Market | Posted on 07-22-2014 | Written by Quita Syhapanya


Technology has come a long way since the first computer.  Where once it was limited, today we all use fairly advanced forms of technology as part of our daily lives. I remember playing Nintendo for the first time as a kid and thinking how amazing it was. I had to press the directional buttons to move Super Mario and the A/B buttons to jump or throw the fireballs that bounced a few time to defeat the enemy. Now you have 3-D games with multiple buttons that have many functions that seems like you need seven fingers and 2 thumbs on each hand to use. Technology today is geared to be visually appealing, keep you connected to the world, and make life easier while entertaining you. Another example is our cell phones that virtually everyone has. There was the old school Zach Morris phone that could double as your VCR to the old Erickson phone where you played “snake” to kill time. Read the rest of this entry »

The Top 5 Home Lenders In Philly Burbs

Posted in National Housing Market, Philadelphia - Market | Posted on 07-21-2014 | Written by Quita Syhapanya

quitaOnce upon a time I worked for a mortgage company and always wondered who closed the most new home mortgages nationally as well as within the markets that the company I worked for at the time primarily lent. I worked for a smaller mortgage company that provided mortgages for purchase or refinance across the country. We were not the largest of lenders nor did we have all the data in hand to find the right opportunities in the new home purchase market. We sold mortgages to whomever we could and whenever we could. Every state had its own specific closing requirements with most of our business in Pennsylvania, New Jersey, Virginia, and California. We wanted to get into every state that we could, but never had the data to understand the lending market in the states we wanted to enter. There are many challenges and barriers in the mortgage industry where relevant data is hard to come by to make decisions. Read the rest of this entry »

The Importance of Measuring Finished Vacant Home Inventory

Posted in National Housing Market | Posted on 07-18-2014 | Written by Eric Allen

eric aIn a volatile housing market, uncertainty tends to creep into the decisions made within the homebuilding industry. Questions such as, “Is now the right time to deliver lots into the market?” … Or, “With the current level of home inventory in our competitive trade area, how will this impact my pricing power?” Managing unknowns and uncertainty is an important aspect of most significant decisions.  However, indecisiveness in the midst of dramatic market swings can have damaging consequence leading to the ignoring of apparent and broad market trends.

Understanding and monitoring equilibrium levels for the new home industry is one way to incorporate broad market trends into your daily decision-making process. Searching for equilibrium is an effort in identifying the balance point of a market, Read the rest of this entry »

Housing Starts Down in June, But Forecast Positive

Posted in National Housing Market | Posted on 07-17-2014 | Written by Brad Hunter

brad h

Housing starts for June SURPRISED on the downside!  Jobs are better, and builders seem more confident, yet the June number was down 9.3% month-over-month (9.0% for single-family detached).

My forecast for 2014, just revised to account for the latest data, is for a 9% increase in total home starts (annual total for 2014 versus annual total for 2013), and for a 6% increase in single-family construction.

Read Full Story


Lot deliveries in Dallas-Fort Worth surge to the highest level in since 2008

Posted in Dallas - Ft. Worth Market, National Housing Market | Posted on 07-16-2014 | Written by Metrostudy News

July, 2014: Metrostudy reports new lot deliveries exceeded the new home starts pace during the second quarter of 2014 for the first time since early 2008.  “Lot development activity has lagged home starts in Dallas-Fort Worth since inventory hit a peak of over 90,000 lots in March 2008. Lot inventory in the region fell to 46,000 lots earlier this year, and less than 40,000 lots if you exclude the stranded lots in less desirable locations,” said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office. Developers delivered 6,300 lots during the second quarter, up 20% from the first quarter and up 68% from the second quarter of 2013.  However, lot supply in the high demand submarkets continue to remain constrained.  “The most active submarkets in Dallas-Fort Worth that account for 75% of the new home demand only have a 14.6 month supply, well below the 20 to 24-months considered to be equilibrium,” said Brown.

The tight lot supply and strong demand has driven up lot costs in the most active submarkets forcing builders to sell homes at much higher prices.  The median price of a new home in Dallas-Fort Worth has risen from $216,700 in 2011 to $269,400 in 2014, a 24% increase.  Only 25% of the new home closings in the second quarter were for homes priced under $200,000, down from over 40% in 2011.  The following table shows the change in the median price of a new home for the top ten submarkets in Dallas-Fort Worth.

Dallas-Fort Worth Top Ten New Homes Submarkets
Rank Submarket 2011 Median Price 2014 Median Price Change in Median Price % Change
1 N Fort Worth $173,000 $212,500 $39,500 23%
2 Frisco $306,200 $438,000 $131,800 43%
3 McKinney $223,000 $303,000 $80,000 36%
4 Denton County $199,200 $209,200 $10,000 5%
5 NWNC Dallas $491,300 $913,200 $421,900 86%
6 Denton $188,300 $224,000 $35,700 19%
7 Prosper $338,500 $392,500 $54,000 16%
8 Allen $385,800 $451,600 $65,800 17%
9 Irving $313,400 $428,300 $114,900 37%
10 SW Fort Worth $143,600 $191,700 $48,100 33%


The NWNC Dallas submarket (South of LBJ and West of Central Expressway) has seen the largest increase in median price due to a large drop in sales of townhouses priced under $500,000 and a surge in sales of single family homes priced over $1,000,000.  The suburbs north of Dallas, including Frisco, McKinney, Plano, Allen and Prosper, experienced a significant jump in median price since 2011.  The higher prices are forcing many buyers to the nearby submarkets of Melissa, Anna, Celina, Little Elm, Oak Point and unincorporated areas of Denton and Collin Counties.

The increased prices are also beginning to affect the growth in starts in Dallas-Fort Worth as some buyers in certain submarkets are beginning to get priced out of the new home market.  Starts during the second quarter in DFW were only up 2% compared to a year earlier.  Some submarkets including Frisco and McKinney (which led the recovery in 2012 and 2013) have seen starts dip slightly this year due to tight lot supply and much higher lot and new home prices.

“We are expecting a 10% to 15% increase in starts during 2014 with the largest share of the increase coming from the first quarter,” said Brown. Metrostudy expects the growth pace to remain slower through the remainder of the year because of low lot inventory and higher prices in prime submarkets.

Relief from the lack of supply is not on the horizon.  Options for homebuyers continue to remain limited during the summer.  Finished new home inventory is 12% below the prior year and represents only a 1.6-month supply, below the 2-months considered to be equilibrium. Additionally, the existing home market has only a 3-month supply of homes on the market, with many high demand submarkets at a 2-month supply or less.  New and existing home inventory is expected to remain low through the remainder of 2014, putting continued pressure on prices.

The Metroplex continues to have strong housing demand due to the highest job growth in the nation, up 113,100 jobs in the last twelve months. 2014 is expected to be another strong year for homebuilding, but the growth rate is moderating because of lot constraints, increased prices and higher interest rates.  “Metrostudy will be watching the inventory level closely for the remainder of 2014 for any signs of easing. Until the supply begins to rise or the job growth slows significantly the market should remain very strong,” said Brown.

DFW Historical Housing Activity and Inventory

D/FW Annual Quarterly Annual Quarterly Finished Months of Lot Months of
Starts Starts Closings Closings Inventory Supply Inventory Supply
1Q11 14,656 3,101 16,640 3,213 3,690 2.7 65,873 53.9
2Q11 13,716 3,653 15,419 3,543 3,310 2.6 62,936 55.1
3Q11 13,961 3,890 14,614 3,872 3,078 2.5 61,033 52.5
4Q11 14,260 3,614 14,625 3,996 3,242 2.7 59,641 50.2
1Q12 14,346 3,189 14,753 3,342 3,185 2.6 58,062 48.6
2Q12 15,188 4,495 15,318 4,108 2,689 2.1 56,152 44.4
3Q12 16,445 5,147 15,820 4,374 2,515 1.9 53,617 39.1
4Q12 17,802 4,971 16,243 4,419 2,862 2.1 51,704 34.9
1Q13 18,980 4,367 17,063 4,162 3,164 2.2 51,216 32.4
2Q13 20,468 5,983 18,113 5,158 2,547 1.7 49,012 28.7
3Q13 21,177 5,856 19,100 5,361 2,526 1.6 47,022 26.6
4Q13 21,230 5,024 20,050 5,369 2,643 1.6 46,243 26.1
1Q14 22,355 5,492 20,594 4,706 2,855 1.7 46,045 24.7
2Q14* 22,501 6,129 20,956 5,520 2,856 1.6 46,246 24.7
Source & Copyright © 2014 Metrostudy
* Preliminary Estimates


For information contact: David Brown @ 214.891.5602 or 214.207.7535

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.

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

The Lots Keep Coming in Austin with another Strong Quarter of Deliveries

Posted in Austin Market | Posted on 07-10-2014 | Written by Metrostudy News

Metrostudy, a housing information and consulting firm, reported today that their second quarter survey of the Austin market counted as many new home starts as the second quarter of 2013.  The fact that the starts total in the last three months matched that of the second quarter of last year shows that the effect of a shift in new home pricing is starting to impact the expansion of Austin’s new home market.  “This time last year 11% of new home starts occurred below $150,000, a volume oriented price point.  Today that percentage is nearly a third of what it was last year based on where pricing fundamentals have pushed builders and developers,” said Madison Inselmann Regional Director of Metrostudy’s Austin market.

Austin builders started 2,688 new homes in 2Q-14, matching the number reported from 1Q-13.  Austin builders started 9,716 new homes in the last twelve months, representing a 7% increase year-over-year.  At the same time, area builders closed 2,446 new homes in the last three months, 10% more than the second quarter of last year.  Over the last four quarters, builders have closed 9,203 new homes, a 14% increase over the prior four quarters.  “The second quarter was a fast moving time for Austin builders, fielding strong traffic through the sales offices and opening new sections of lots,” remarked Inselmann.

“In terms of lot production, Austin is having a banner first half to be sure.  We welcome the new home sites, as it was about six months ago that the lot shortage was constraining the market’s ability to grow,” says Inselmann.  In 2Q-14, area developers delivered 3,157 vacant developed lots.  The second quarter’s strong delivery brings the 2014 year-to-date delivery count to 6,007, a total that is higher than the twelve month total in both 2011 and 2012.  As a result of the strong first half delivery, Austin’s VDL count declined only 2% to 14,910.  “The first half lot delivery breeds confidence that even if builders can’t meet all the demand, they should be able to improve upon last year’s mark.”

Austin’s housing inventory levels remain healthy for a growing market with builders currently holding 4,924 homes in inventory, a 6.4 month supply.  The number of homes sitting finished and vacant in 2Q-14 declined 6% from the first quarter of the year.  “While a growing number of finished and vacant homes is an indicator of a slowing market, in a market that is so supply constrained in all kinds of available housing (new, resale, rental), as Austin is, these finished and vacant homes could provide a new option for the many folks that are moving to Austin each week,” reports Inselmann.

“In the last twelve months we’ve started 22% more homes between $500,000 and $750,000 than we have below $150,000.  That right there tells you all you need to know about the shifting fundamentals in the Austin market.  Permitting and development costs, not to mention the growing land pricing, are pushing Austin away from the market below $150,000, historically the entry-level market.  The strength of the local job market, in addition to the voluminous in-migration, insures that we see sufficient demand for these higher price points.  That being said, our growth rate will be tempered slightly by the absence of the volume-priced market,” concludes Mr. Inselmann.

Madison Inselmann @ 512.473.2250, ext. 1000 or 512.720.2900

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.

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


This Old Porch, This Old Price Point: An Unlyrical End to San Antonio’s Entry-Level Housing

Posted in Austin Market, Dallas - Ft. Worth Market, Houston Condo Market, National Housing Market, San Antonio Market | Posted on 07-10-2014 | Written by Jack Inselmann

jack iAs my good friend Robert Earl Keen has sung many times, “The road goes on forever and the party never ends…”!  Who doesn’t like that thought or feeling?  It outlines the idea that everything that is good or necessary is always right there in front of you.  It’s true that San Antonio builders have definitely enjoyed a party these last twelve months as the local market grows out of the recession. Today, however, the idea that “the road goes on forever” seems less and less realistic for the affordable, entry-level new homes in San Antonio.  A regular staple of housing supply for decades, this portion of the market has been equally important to the builders who build these homes as the families who create memories within them.  The vital portion of San Antonio’s new home market, those homes priced under $150,000, has quickly evaporated in the last couple of years.  In the last three years this price point’s share of new home starts has dropped from 30% of the market to just 6%.  Shoot, only ten years ago this price segment garnered a 63% share of all new home production – at that time an annual starts rate of 7,300; now builders can barely construct 600 homes annually.  This has to do with supply and not demand as there continues to be significant levels of demand for the more affordable product.

People will say, “San Antonio still has way more affordable product than most of the other major MSAs around the country so what’s the big deal?”  As Lyle Lovett would respond, “You say you’re not from Texas, man, as if I couldn’t tell. That’s right, you’re not from Texas.”  The big deal is that the affordable market has been arguably the most important part of housing in San Antonio for decades by creating opportunities for all people, the families, those in the community with moderate incomes.  Here locally, this remains so important because our median income lags most major markets, and in Texas falls approximately 15% below Austin, Dallas and Houston.  As a result, other areas can more easily move into higher priced arenas of housing and qualify much easier for a mortgage. In San Antonio, many qualified buyers cannot afford a higher priced product and will have to go to the resale market or, worse yet, continue to rent and not reach their homeownership dreams [one of America’s most important ambitions, by the way, but that’s another blog].  When Robert Earl and Lyle sing “This Old Porch,” the young fellow rents the porch while the weathered Texas man owns it.  It’s who we are.

Why is this happening?  Well, of course, a healthy market like ours is subject to the pricing factors of supply and demand.  Low lot availability in an expanding market leads to price increases which is impacted more today by rising development costs.  While it is easy to point to builders and developers for the increase in land and lot pricing, the unindicted co-conspirators in this equation are the municipalities and regulatory bodies that govern the housing industry with increasing fees, unnecessary delays in permit approvals, anti-development mentalities, and general anti-growth attitudes.  Maybe more importantly, the sincere lack of interest on the part of cities and counties to allow more density, and therefore more affordability and accessibility, hurts families on the lower to moderate income spectrum.  Not quite fair is it?  Without a change in mentality in these areas, Willie Nelson might be right: “Turn out the lights, the party’s over.”

Though the focus of this narrative is the new home product under $150,000, it must be noted that the $150,000 to $200,000 housing product has been put on the endangered species list and has only a few years left under current environments.  This growing trend, this pricing squeeze, is happening in the other Texas markets and we all can tolerate only so much cost increase before it slows down the overall growth pace.  There is much more to say but this will suffice for now.  As a good friend told me one time, “Jack, I could listen to you talk all day, and for a moment there I thought I was going to.”

As an encore, I think this is a watershed moment for San Antonio, many would say a sad moment.  The fundamental pricing of bringing a lot to market has jumped up recently and it is more likely to stay the same or rise even higher than it is to drop back down.  If this is true, it would mark the end of San Antonio’s traditional price point, the price point of my first home, the home my boys grew up in.  On that note, I let Jimmy Buffett take us home: “It’s been a lovely cruise.” Too bad it has to end.  If that’s the case, I think I’ll join Mr. Thorogood on the deck for “One bourbon, one scotch, and one beer…”