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.

Lots of Catch-Up

Posted in Atlanta Market, Austin Market, Central Florida Market, Dallas - Ft. Worth Market, Denver - Colorado Springs Market, Houston Market, Inland Empire Market, Jacksonville Market, Las Vegas Market, Maryland Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Phoenix - Tucson Market, Raleigh - Durham Market, Sarasota - Bradenton Market, South Florida Market, Southern California Market, St. George - Mesquite Market, Tampa Market | Posted on 08-04-2014 | Written by Brad Hunter

brad hWe have been talking for years about the lot shortages that builders are facing.  Now, it’s time to talk about how many lots are being developed.  Builders and developers are now playing “catch-up,” with builders buying land and lots and developers/investors paving roads and putting in infrastructure to serve the builders’ needs at a frenetic pace.

The pace of lot delivery (completion, ready for the builder) has gone up 140% in the past two years, much faster than the pace of housing production has risen (+84%).  Despite this increased pace, lot development STILL lags the pace of home production nationwide.

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In some markets, the lot production machine is in full gear, and has caught up with demand.  This is a good sign for builders, and a vital turning point for home production in 2015 and beyond.

The TOP TEN states for lot production in 2Q14 are:

State       2nd Q.   Starts        2nd Q. Lot       Deliveries
Texas 19,714 18,931
Florida 12,416 10,974
California 10,050 10,219
North Carolina 4,866 3,168
Georgia 4,489 1,270
Colorado 3,985 3,276
Arizona 3,519 4,596
Maryland 2,436 2,122
Utah 2,328 2,498
Virginia 2,198 1,850

Note that lot production has caught up with new home production in California, Arizona, and Utah.   Florida development is woefully far behind demand for lots, hence the skyrocketing cost of finished lots there.

Metrostudy defines “future lots” as those that are in the pipeline (some are pre-entitlement), and Florida has the deepest pipeline.   Below are the top 10 states ranked by known future lots.

State Future Inventory
Florida 1,597,055
California 1,378,299
Arizona 1,213,476
Texas 651,413
Colorado 406,613
Georgia 316,956
Illinois 281,054
Nevada 227,121
Maryland 194,829
Virginia 183,613

 

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
E-mail: madisoni@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.

 

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…”

Texas Housing Survey: The Coming Affordability Squeeze

Posted in Austin Market, Dallas - Ft. Worth Market, Houston Condo Market, National Housing Market, San Antonio Market | Posted on 07-01-2014 | Written by Metrostudy News

Metrostudy_Texas_starts_by_market final

July 1, 2014: Houston Texas – Metrostudy’s 1Q14 survey of the Texas Housing market shows even as housing continues to boom, new and lower income buyers are getting priced out of the market.

Texas right now is home to the strongest housing markets in the entire country. Texas was on a different cycle long before the boom and the bust came along. Driven by past swings in oil prices, the state was already on a rapid-growth trajectory before the rest of the country went on its early-2000s building binge. Said colloquially, when Phoenix and Las Vegas caught pneumonia, Houston sneezed and kept on going, right to the top of the national market list.

The impact of the fracking revolution cannot be understated. With oil prices well above the $75 per barrel threshold of profitability, the energy sector has been supercharged, and this has fed the growth of housing demand. Houston has been the main beneficiary of this, but the entire state has felt the heady effects. The impact of the energy boom has been felt in all businesses in Texas.

“As strong as the Texas markets are, there is one thing missing: a strong first-time home buyer segment,” said Metrostudy’s Chief Economist Brad Hunter.

In all four housing markets in Texas, developers and builders are shifting away from affordable or “entry-level” product towards higher priced “move-up” housing. There are a number of factors that have contributed to this shift, but they all come back to margins. “The costs of nearly every input including land, materials, and labor have seen sharp increases during the housing recovery. In order to mitigate these increased costs, builders have chosen to construct more homes at higher price points (and fewer at lower price points) in an effort to maintain their profit margins. In addition, the scarcity of housing product in many Texas markets has increased prices that builders are able to charge home buyers for the same product. As a result, the quantity (and proportion) of homes built priced less than $150,000 has dropped dramatically during the last three years.

In Austin, during the four quarters ending 1Q12, 13.3% of all new housing starts were priced less than $150,000.  By 1Q13 that percentage had decreased to 11.1% of annual starts, and as of 1Q14 only 4.3% of annual starts in Austin were priced under $150,000. During that same period, starts on homes priced greater than $300,000 grew from 22.2% to 36.4%.

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“As more builders focus their product to the buyer from $300,000 to $500,000, others are employing creative solutions to bring product to market that is more in-line with the historical pricing trends in Austin. Some of these tactics include introducing the detached condo product, entering new submarkets, or even expanding the range of gentrification. Austin continues to expand the heart of its new home market while these creative solutions add diversity to the market’s housing mix,” said Madison Inselmann, Regional Director of Metrostudy’s Austin market.

In Dallas/Ft. Worth, 13.7% of annual starts were priced below $150,000 as of 1Q12. That proportion has decreased to 6.5% as of 1Q14. During the same period, starts of homes priced greater than $300,000 grew from 28.7% to 41.9%

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“New homes priced under $150,000 are rapidly disappearing from the market because of shrinking lot inventory, rising land and construction costs. There are just over 5,000 developed lots available for home in this price range and they are not being replaced. Only 2% of the new lot deliveries in Dallas-Fort Worth last year were for homes priced under $200,000. Buyers searching for a new home in this price range are being pushed to the existing home market in most submarkets. They may soon be forced to stay in the rental market,” said David Brown, Regional Director of Metrostudy’s Dallas Ft. Worth Market.

In Houston, 19.1% of annual starts were priced below $150,000 as of 1Q12. That proportion dropped to 16.3% in 1Q13 and has since declined to only 9.8% as of 1Q14.  Meanwhile, the proportion of home starts priced greater than $300,000 grew from 27.7% to 39.4%.

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“Housing production is still struggling to catch up to burgeoning new-home demand, so more expansion is on the way. The pace of job relocations into Houston will be slower this year than the breakneck pace of 2013, but the influx of companies and workers will continue to support demand growth,” said Brad Hunter, Metrostudy’s Chief Economist.

In San Antonio, 18.6% of annual starts were priced less than $150,000 in 1Q12. Since then, this share has declined by 11.3% to only 7.3% of all annual starts as of our most recent survey. Builders in this market have increased the proportion of homes started in the “move-up” market over $300,000 from 18.7% in 1Q12 to 29.2% as of 1Q14.

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“San Antonio has historically been one of the most affordable new home markets in the country. Recently it has become increasingly difficult to build a home priced below $150,000 in San Antonio,” said Jack Inselmann, Regional Director of Metrostudy’s San Antonio Market.

Combine this with the fact that incomes are not rising at the pace of rising housing costs, and the end result is buyers are being priced out of the market, effectively limiting the pace of housing growth. “This is not to say that San Antonio is not a healthy housing market, by any means, as indicators point to a market that should enjoy 8,000 to 9,000 home starts again in 2014,” said Randall Allsup, Senior Consultant of Metrostudy’s Texas market.

In all the Texas markets, the first-time homebuyers have been given less attention by many public builders, but we do anticipate a return of entry-level demand (and product that serves those buyers) in the next year, gaining even more momentum in 2015 and beyond. DR Horton and LGI are the tip of the spear for the entry-level right now, but we are expecting others to follow suit over the next few years. Continued momentum in labor markets will support more household formations (20-somethings moving back out of their parents’ basements), and more reasonable mortgage requirements by the banks will help as well.

For information contact:
Danielle Fiore @ 813-443-6504
dfiore@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.

The Other Top Fives: Insight into the Most Active Subdivisions in Austin’s Emerging Submarkets

Posted in Austin Market, National Housing Market | Posted on 06-18-2014 | Written by Madison Inselmann

One of the best pieces of advice I received when I moved to take on the Austin Directorship was “get out of the office…the numbers won’t tell you as much as the market.”  True that.

Each quarter, once my research all-star team compiles the quarterly numbers, the analysis I draw out of the figures provides a road map for interesting micro-trends worth looking into over the subsequent ninety days.  The company gives me a gas stipend, might well use it, eh?

This summer, as I’m making my way from Sonterra in Jarrell down to Garlic Creek West in Buda, and everywhere in-between, I have an enhanced tool riding shotgun, giving me on-demand metrics of the subdivisions I’m touring.  The upgraded Builder Insight tool, a mobile-friendly, user-friendly version of our proprietary database platform, enables me to identify the most active communities in my area of interests on the fly, enabling me to maximize my time when I happen to find myself in the far reaches of the ever growing Austin MSA.  Austin’s most active subdivisions are predictably in the northern part of the MSA along the thoroughfares that have historically been favored by builders and consumers.  The following is a look at my time exploring the Other top fives in the area.

Tuesday: Next Stop on the Craigslist Tour: Pflugerville

In chasing down discarded furniture to repair on the weekends, Craigslist directed me to a storage facility at Rowe Lane and Hwy 130 for an old coffee table that was destined to become a tufted ottoman.  I planned to meet a Samsung employee at 3:30pm, so I took off at lunch time, with an iPad and a sandwich to take a look at the activity in one of Austin’s fastest growing submarkets.

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Over the last twelve months, Pflugerville’s new home starts rate has grown 35%, from 619 to 834.  The echo boom in Pflugerville makes sense when looking back.  Coming out of a recession (2011) builders and consumers flock to our A++ micro-markets (read: Cedar Park/Leander).  As the market recovers and activity grows, prices grow accordingly, forcing Austinites to look for new markets.  With its relative access to downtown, and the market overall, and its relatively affordability, the area has become a desirable submarket.  The recent growth has caused prices to rise in this historically affordable area.  To the point, 52% of all starts this time last year occurred below $200,000.  In the last twelve months, only 28% of the starts occurred in this affordable price range.  Now the submarket still does a majority of its activity between $200,000 and $300,000, keeping the area relatively affordable to Austin’s top submarkets.  However, this market has changed with the introduction of new subdivisions whose amenities and housing products warrant the higher prices.

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Wednesday: Any Excuse is a Good one to Drive Highway 71

After our Annual BBQ Real Estate BBQ event hosted at one of our founder’s ranches I realized that I had to return to the site as I had left some banners and coolers onsite.  (Full Disclosure: I accidentally left these banners and coolers out there like George Costanza accidentally left his furry Russian sable hat at his date’s house.  I’ll take any excuse to get out west.)  In order to take advantage of the beautiful day and a conversational mood, I figured I’d tour the most active developments in the Lake Travis submarket along Highway 71.  Homes in this area never disappoint.

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This area of the world has participated in the recovery in terms of growing starts rates and high new home pricing.  Given the character of the area, the highly ranked school district, and the natural beauty, the developments carved into the near east portion of the Texas hill country have drawn buyers from sea to shining sea.  The mythological “California Buyer” (comes to the market to be surprised by what their money can buy and then pays in cash) has been credited with much of the success, but a discerning consumer looking for a unique hill country setting with access to retail and restaurants are coming from many states.  Encouragingly, this area is seeing the winding down of one of the top communities in Austin in recent years (Falconhead) but not losing starts activity due to the rise of Rough Hollow, Ladera Ranch, and Sweetwater in the last 18 months.

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Thursday: HBA Event Turns into tour of Manor

Reluctantly getting hooked on the AMC show “Mad Men”, I told my wife, who has a master’s degree in marketing, “marketing seems like a pretty interesting field.  Maybe that’s something I could get into.”  With the exasperation of a woman who must consistently redirect a husband’s misguided assumptions, she quickly shared that what they’re doing is advertising and advertising is only part of the larger concept of marketing.  Too late, I had already signed up for the HBA’s Marketing Lunch and Learn in hopes of becoming the housing industry’s Don Draper.

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Being located northeast of Austin, I figured I’d extend this lunch into a tour of the Manor market.  With the completion of the Manor Expressway, the tolled portion of US 290 east of town, the area should receive a boost in image, if not new home activity as well.  This roadway endeavor created such a headache for drivers that people couldn’t wait to get through the area, leaving little patience to stop and look around.  In the last year, the Community of Harris Branch, Presidential Glen, and Pioneer Crossing West have all seen year over year gains greater than 60%.

mmmmm

For the first version of Metrostudy’s mobile application, you had access to all of the data that you needed as you went along, but you had to drive the application.  The latest iteration more rides with you like a quiet land man (if there is such a thing) delivering the information you’re looking for as soon as you pop open the screen.  The Austin market is becoming more niche as we enter new and frontier submarkets.  With this tool in hand, these “new locations” will feel familiar soon enough.

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.

Piggin’ Out in Central Texas: A Perspective on Austin’s Continued Expansion

Posted in Austin Market | Posted on 05-20-2014 | Written by Madison Inselmann

For Memorial Day weekend I’m planning to roast a pig to feed a gathering of friends down in Galveston, TX. Being ten days out, I started shopping my usual suppliers from Austin to Houston and quickly learned something wasn’t quite right. Most of the places I called either didn’t have any available or were charging triple or quadruple what I’ve paid in the past. The explanations ranged from a 10 minute dissertation on the health of American hog herds to the simple line “sometimes there are pigs, sometimes there are no pigs.” Though a simple phrase, it highlights the fact that I thought there will always be pigs and that assumption almost cost me and my friends a delicious dinner.

I assumed that hogs would always be plentiful because of previous shopping experiences and was surprised to hear of a shortage. Builders, on the other hand, are finding that the buyers are right where they thought they’d be in this expanding market. Today’s Austin buyer is in the A++ suburban markets of south central Williamson County as well as the emerging sub-markets in Kyle/Buda and the northeast portion of the market along Hwy 130. Read the rest of this entry »

Austin Housing Market Starts 2014 Strong: New Home Starts & Vacant Developed Lots up in a Big Way

Posted in Austin Market | Posted on 04-17-2014 | Written by Metrostudy News

Metrostudy, a housing information and consulting firm, reported today that their quarterly survey of the Austin market revealed a 16% increase in new home starts from 1Q-13.  Metrostudy’s survey recorded 2,209 new detached home starts in the first quarter of 2014, a 16% increase from 1Q-13’s total. Austin builders started 9,668 new homes in the last twelve months, representing a 15% increase year-over-year.  At the same time, area builders closed 2,045 new homes in the last three months, 2% more than the first quarter of last year.  Over the last four quarters, builders have closed 8,916 new homes, a 19% increase over the prior four quarters.

“The strength of demand over the last eighteen months has once again emboldened builders and developers to invest in new areas in order to keep up with the growing variety of buyers in the changing Austin market,” said Madison Inselmann Regional Director of Metrostudy’s Austin market.  “In order to meet the demand of today’s buyer, the market is moving into new submarkets and is introducing some new product offerings.”

“Just like last year, developers start 2014 strongly by delivering more than 2,500 vacant developed lots to the market in the first quarter.  Hopefully, unlike last year, this kind of delivery can continue through the end of the year as the Austin market remains tight on available lots,” says Inselmann.  The 2,584 vacant developed lots delivered in the first quarter represent the largest single quarter delivery since the first quarter of 2008.  Over the last twelve months, developers have brought 8,404 lots to market, more than 1,200 fewer than were absorbed over that same period.  As a result, the total lot count in Austin stands at 14,219, 8% below 1Q-13’s count.  The growth in new home starts has dropped the relative lot supply in Austin to 17.6 months, below the 20 months considered equilibrium in the Austin market.  “The lot delivery in the first quarter was a welcomed sight after the disappointingly light delivery to end 2013.  That being said, we won’t ease this lot crunch until we see consecutive quarters of delivery on this scale,” states Inselmann.

Amongst all of the positive metrics experienced in 2013 (increase in starts, rising prices, strong in-migration), one of the more significant numbers was the increase in model homes open for business.  By opening new subdivisions and sections, the market will be better able to meet the robust demand in 2014 more efficiently than it could by just extending existing developments, according to Metrostudy.

“The unusually cold weather may have kept traffic numbers down to start the year but the new home marketed continued to expand nevertheless.  With strong job and population growth at our backs, the new home market should continue to expand in relation to our ability to deliver lots to market.  As we do continue to expand, it will be important to keep an eye on affordability in the production home market, as the median new home price continues to tick up in relation to the median household income in the Austin MSA,” concludes Mr. Inselmann.

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industriesnationwide. 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.

Ice Breakers in Central Texas – Austin’s Frigid Weather and Tight Lot Supply

Posted in Austin Market | Posted on 03-03-2014 | Written by Madison Inselmann

Stop what you’re doing…Texas is frozen.  It’s actually consistently freezing in Austin, with 31 of our first 46 days (a full two-thirds, by my Aggie math) of 2014 dipping into the 30’s.  Among the school closings, office delays, and “work from home” assignments, the best thing to come from this cold snap is the bounty of material for professional small-talk.  “How about this weather”…”What’s it like in your area”…”I heard Ralph slipped walking his dog”.  It’s never been easier to get the conversation going than the first six weeks in Austin.  (Below is a collection of this “Texas snow”)

Texas Snow Source: Real Texans

The worst thing about this cold snap, real estate-wise, is the delays that this weather brings.  This realization hit me on my drive to work two Thursdays ago.  Waiting my turn to merge onto Mopac northbound NPR was listing off the schools and government offices that were closed, or at least delaying their start times, and I thought “oh no, who’s going to approve the permits?” Read the rest of this entry »

1/16/14: Metrostudy – Austin Director to Give Williamson County Outlook to HBA

Posted in Austin Market, Events | Posted on 01-10-2014 | Written by Madison Inselmann

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HBAAAA

Austin Director Madison Inselmann

to Give HBA Williamson County Outlook

Join us for the inaugural meeting of the new Williamson County Chapter and gain valuable insight into what to expect in 2014.

Thursday, January 16th

madison iWHERE: The Ranch House at Teravista – 4333 Teravista Club Drive Round Rock, TX 78665

AGENDA: 11:30am – 1:00pm

All HBA Members are welcome; $20 for HBA Members, $30 for Non-Members

SPEAKERS: Madison Inselmann, Metrostudy’s Regional Director, Austin

For more information contact Kathey Comer at (512) 454-5588, ext. 106

ONLINE REGISTRATION IS REQUIRED – DEADLINE IS MONDAY, JANUARY 13th