Metrostudy reports new home starts grew 19% and closings surged 23% in 2013

Posted in Dallas - Ft. Worth Market | Posted on 01-14-2014 | Written by Metrostudy News

(Dallas, TX – January 13, 2014) Dallas-Fort Worth New Home Starts and Closings

Metrostudy reports the highest new home starts and closings in six years for the Dallas-Fort Worth Metroplex.  “The strength in the housing market during 2013 pushed residential construction activity to the highest level since 2007 in Dallas-Fort Worth”, said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office.  The torrid pace of sales during the first half of 2013 reduced the inventory of new and existing homes to record lows, pushing prices significantly in the Metroplex.  “Supply constraints were the headline in the homebuilding business for 2013 and will likely remain the story in 2014”, said Brown.  Existing home inventory ended the year at a 2.6-month supply, the lowest figure Metrostudy has on record and well below the 6-month supply considered to be a balanced market.  Finished new home inventory ended the year at a 1.6-month supply, below the 2-months considered to be equilibrium and 8% below 2012. Construction delays due to subcontractor constraints added between 30 and 45 days to the construction time and slowed completions for the year.  Additionally, lot deliveries lagged the absorption all year driving down lot supply to just over a one-year supply in most A and B locations.

Unlike 2012, the Dallas-Fort Worth Metroplex experienced a more normal seasonal slowdown in sales during the fall and early part of the winter.  With interest rates increasing and prices jumping 10% or more in the A locations, buyers took a bit of a breather in the second half of 2013.  “The year-over-year growth was on an unsustainable track from the first half of 2013.  It was inevitable and a good thing that the growth rate moderated in the second half of the year” said Brown.  Existing home sales and new home starts and closings were still higher in the second half of 2013 than the unseasonably strong the second half of 2012.  “The market will not have the ability to grow at the same rate in 2014 as it did in 2013 because of the supply constraints” said Brown.  The region has almost 3,000 fewer existing homes on the market than it did at this time last year (down 13%), and finished new home inventory is 8% below a year earlier.  Additionally, some buyers won’t find the same price points available in certain submarkets in 2014 that were available last year.

With the increased construction activity in 2013, the months of supply of lot inventory in many submarkets, such as Frisco and McKinney, has dropped more than 30% during the last year, driving up lot prices significantly over the last year in these high demand locations.  The higher lot prices are pushing builders to more affordable submarkets to meet buyer demand at certain price points.  Even with increased lot development activity in 2013, these constraints are not likely to be alleviated during 2014.  There are currently about 15,000 lots under construction in the DFW Metroplex.  Only about 3,000 lots were nearing completion by the end of the year.  Thus, new lot deliveries are likely lag the demand for most of 2014.

The end of the year continued to see the recovery expand to across the Metroplex.  Up until the fourth quarter, the recovery was led by the northern suburbs, such as Frisco and McKinney.  During the fourth quarter, the growth in starts was led by more peripheral submarkets that had less lot constraints and lower prices. The recovery is expected to continue to expand in these secondary areas in 2014, with the growth limited in the highly constrained submarkets experiencing much higher lot prices on the next generation of developments.

2014 is expected to be another strong year for homebuilding activity, but the growth rate will likely continue to moderate because of lot constraints and home affordability pressures due to rising prices and higher interest rates.  The Metroplex continues to have strong housing demand due to the significant job growth.  “Metrostudy will be watching the inventory level closely in 2014 for any signs of relief. 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

david brown chart 4Q

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, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

1/22/13: Metrostudy – Greater Fort Worth’s Builders Association Annual Economic Forecast

Posted in Dallas - Ft. Worth Market, Events | Posted on 01-10-2014 | Written by David Brown

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Greater Fort Worth’s Builders Association

Annual Economic Forecast

The breakfast will feature a dynamic presentation by David Brown, Director of the Dallas/Fort Worth office of Metrostudy, the nation’s leading provider of primary and secondary market information to the housing, retail and related industries nationwide. David will share pertinent information on the local housing markets for 2014.  This will be an informative presentation with exceptional facts and figures.

The GFWBA will provide a color handout to each attendee with David’s PowerPoint presentation included.

As a member of the Greater Fort Worth Builders Association, you are being offered the following partnership opportunities for the January 22nd event. This event has historically been well attended by our Builder members and Associate members.

Wednesday, January 22, 2014

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WHERE: Ridglea Country Club

AGENDA: 8:00am – 9:30am

Breakfast provided

Tickets:  $50 per person – limited seating

SPEAKERS: David Brown, Metrostudy’s Regional Director, Dallas/Ft. Worth

For more information about this event and to register CLICK HERE

1/17/13: Metrostudy – 5th Annual North Texas Realty Symposium

Posted in Dallas - Ft. Worth Market, Events | Posted on 01-10-2014 | Written by Metrostudy News

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5th Annual North Texas Realty Symposium

The Appraisal Institute, North Texas Chapter, proudly presents the 5th Annual North Texas Realty Symposium.

This year’s program will include expert insights into the North Texas real estate market, and the regional and national economy.

Leaders in the industry will share their first-hand experience and perspective on many critical issues.

Learn about the current state of the real estate market and economy, and 2014 projections.

Friday, January 17, 2014

david bWHERE: The Crowne Plaza Dallas Hotel – 14315 Midway Road, Addison, TX 75001

AGENDA: 8:30am to 5:00pm

Continuing Education Credit

Appraisal Institute – 7 hours

ACE (Texas Appraiser Licensing & Certification Board) – 7 hours

MCE (Texas Brokers/Salesmen) – 8 hours/0 legal hours (pending)

Fees

$200.00 – On or before January 15, 2014

$225.00 – After January 15, 2014

Discount of $25.00 per registrant for groups of four (4) or more.

Notify the Chapter Office (ainorthtexas@sbcglobal.net) to register groups of four or more

SPEAKERS: Dr. Mark Dotzour, Chief Economist, Texas A&M Real Estate Center

Ken Wilson, MAI, SRA, 2014 President, Appraisal Institute

David Brown, MAI, SRA, Director, Metrostudy

Russell King, Vice President, Cencor

Herb Weitzman, CEO and Chairman, The Weitzman Group/Cencor Realty

Jack Fraker, Executive Vice President, CBRE

Lamont Rattler, Associate Director, Multi-Family, Cushman & Wakefield of Texas, Inc.

Tony Spaeth, Managing Director, Greystone

Chad Edwards, Program Manager, NCTCOG

John Terrell, Vice President Commercial Development, Dallas/Ft. Worth International Airport

Jack Wierzenski, AICP, Director of Economic Development, DART

Terri Hayley, Area Sales Manager, MHI, Plantation and Coventry Homes

David Cunningham, Director of Development and Construction, Granite Properties

Jose Montoya, Energy Services Green Building Consultant, Jordan & Skala Engineering, Inc.

Robbie Baty, Director of Leasing Services, Cushman & Wakefield of Texas, Inc.

Craig Bradley, Lakewood Brewing Company

Kelly Hampton, Senior Vice President, Venture Commercial

Neva Dean, Planning Manager, City of Dallas

QUESTIONS: Contact the Chapter Office – ainorthtexas@sbcglobal.net or 972-233-2244

Detailed information and online registration is at: http://www.appraisalinstitute.org/education/northtexas.aspx

Metrostudy reports new home starts grew 14% and closings surged 22% in the third quarter of 2013

Posted in Dallas - Ft. Worth Market | Posted on 10-26-2013 | Written by Metrostudy News

(Dallas, TX – October 26, 2013) Metrostudy reports the Dallas-Fort Worth new home market grew at a slower rate in the third quarter of 2013, after growing at a 30+% rate for the prior four quarters.  “Although we expect new home starts to continue to grow rapidly over the next two years, the growth rate is likely to moderate in the last quarter of 2013 and in 2014”, said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office.  Several factors are causing the growth rate to slow.  With starts 26% higher year to date than the prior year, future quarters activity will be compared to much higher quarterly starts instead of comparing to weak quarters, as was the case over the last year.  Additionally, builders have raised prices significantly over the past year and interest rates jumped during the summer, weakening affordability.  Finally, the lot supply has continued to shrink in the best locations leading many builders to limit sales in some communities.  “It is likely homebuilders will start 22,000 homes in 2013, which is the most new home starts since 2007”, said Brown. Starts are expected to grow again in 2014 because of the strong job growth in the region and low current inventory level.

Even though builders started 19% more homes during the third quarter than the prior year, finished new home inventory fell another 5%.  Finished vacant inventory is at a 20-year low and represents only a 1.5-month supply, well below the 2-month supply considered to be equilibrium.   Even though price increases slowed somewhat during the third quarter because of the higher mortgage rates and normal seasonal slowdown in sales, the extremely low inventory level could lead to large price increases again next year once the spring selling season begins.

New home starts continued to grow the fastest at the higher price points.  Starts were up the most during the third quarter for homes priced over $350,000.  The buyers in these price ranges are the least affected by the recent increase in interest rates.  Starts for homes priced under $200,000 fell 15% as the supply of affordable lots in the most desirable locations continue to disappear.

New lot deliveries remained well below the starts pace during the third quarter, causing the already low lot supply to fall further.  Builders and developers delivered approximately 3,600 lots in the third quarter while almost 6,000 lots were absorbed in the market.  Although the total lot inventory represents a 26.5-month supply, the most active subdivisions (which account for 50% of the new home demand) have a very restricted 12-month supply. Equilibrium is considered to be in the 20 to 24-month range.   “The low lot inventory is continuing to push lot prices in the high demand locations” said Brown.  “If lot deliveries do not accelerate in the top submarkets during the last quarter and first half of next year, the growth in starts may begin to slow more due to supply constraints.” The number of lots under construction jumped by approximately 1,000 lots during the quarter; however 75% of the lots are still in the road excavation stage of construction.  Only 3,600 lots were in the paving stage at the end of the third quarter, suggesting it is unlikely new deliveries will jump significantly in the fourth quarter.  Therefore, lot supply is likely to become more constrained in the coming months.

The recovery continues to be led by the northern suburbs.  Frisco, Denton, Carrollton and North Fort Worth reported the largest increase in starts over the last year. Collin, Denton and Tarrant counties experienced the largest jump in starts during the third quarter.  The recovery has now spread to most of the counties in the Metroplex.

DFW Historical Housing Activity and Inventory

david b 3q13

For information contact:
David Brown @ 214.891.5602 or 214.207.7535
E-mail: dbrown@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, 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

Texas Counties Lead Nation in Relocation Activity; Texas a ‘Domestic Migration Destination’

Posted in Austin Market, Dallas - Ft. Worth Market, Houston Market, Rio Grande Valley Market | Posted on 10-24-2013 | Written by David Jarvis

http://www.reuters.com/article/2013/10/01/tx-tex-assoc-of-realtors-idUSnBw015246a+100+BSW20131001

According to a report released by the Texas Association of Realtors, Texas, often referenced as a destination for immigration, is also a national leader in relocation activity.

According to the report, Texas experienced a net gain of households – with 10,326 more households moving into Texas than Texas households moving to other states. Bexar County experienced the largest net inflow in Texas and the fourth-largest net inflow of households (5,601) in the U.S., with six other Texas counties ranking within the top 20.

Harris County is the most mobile county in the Lone Star State, ranking No. 1 in Texas and No. 3 nationally for the largest inflow of households (67,299). Dallas and Tarrant counties are the second- and third-most mobile Texas counties, ranking No. 7 (54,388) and No. 16 (40,699) nationally for the largest inflow of households.

This report comes six months after U-Haul named Texas the No. 2 growth state for 2012 and Houston as the nation’s top relocation city with Austin as the third-most popular in its 2012 relocation report.

Housing ‘Affordability’ in Texas

Posted in Austin Market, Dallas - Ft. Worth Market, Houston Market, San Antonio Market | Posted on 09-13-2013 | Written by Madison Inselmann

Webster’s dictionary defines “affordable” as…a terrible way to start a blog.  The term affordability means different things to different people.  To me, “affordable” means buying Aggie football tickets that cost less than the hotel room I reserved.  For my neighbor, who drives a Mercedes, “affordable” means buying a luxury car while renting a 950 square foot apartment.  To City of Austin leaders, “affordable housing” means a residence that a family can purchase who make less than 80% of the city’s median income.  Affordability for today’s purposes will be the ability of the median income to qualify for the median home in the market.

Texas’ recovery has been highly touted and rightfully so.  It started notably earlier and notably stronger than any other state, not to mention the nation as a whole.  Job growth over the last three years has translated into robust home demand across the state (new, resale, and rental).  The strong growth in demand has outpaced the ability to replace new lots, resulting in declining inventory levels.  As the holy cross of economics dictates, when supply is tight and demand is up prices strengthen accordingly.  Each of the major Texas markets has experienced home price increases, both new and resale, an encouraging trend for the market overall.

When interest rates jumped in the middle of the summer, the consumer lost some purchasing power.  While it is important to remember that today’s rates still rank extremely favorably when looked at in a historical context, the impact of the rate increases against strengthening prices is worth some examination.  In the image below, the major Texas metropolitan areas are ranked by “affordability” the comparison of the median home price with the median household income.

ta

Fort Worth, with the lowest median new home price in the state, leads the way in affordability despite a relatively low median income.  Interestingly, Dallas is second in affordability thanks in part to the strongest household income in Texas.  Austin stands alone as having the greatest divide between median income and median home price.  Austin’s income ranks second highest amongst the state’s metropolitan areas at $56,076 per household.  Nevertheless, the median new home price growth over the last two years (+17%) has outpaced wage growth leading to a nearly $30,000 discrepancy between what the median household can qualify for and what the median home available in the market today.

To correct this imbalance, you can either pay employees more money or diversify the housing supply.  During the recovery, much of the new home activity has occurred above $200,000.  In fact, over the last three years, Austin builders have doubled the number of starts occurring between $300,000 and $400,000.  This is due to the combination of who could qualify for a mortgage and where land and material price increases have pushed builders.

In the current environment, median incomes and median prices are expected to each rise, though prices tend to outpace wage growth.  This mismatch will be amplified by the steady rise in interest rates that is expected in the future.  Where we’re building and selling homes today may not match where we are building and selling homes in eighteen months depending on how well the buyer has positioned themselves for the growing interest rate environment.  It’s been a strong nine months in 2013.  It’ll take some work, and maybe some creativity, to maintain that pace going forward.

New home starts surged 32% and closings jumped 25% in the second quarter of 2013

Posted in Dallas - Ft. Worth Market | Posted on 07-08-2013 | Written by Metrostudy News

(Dallas, TX – July 8, 2013) Metrostudy reports the Dallas-Fort Worth new home market continued to expand rapidly during the second quarter of 2013.  “Homebuilders continued to report strong year-over-year gains in net sales during the quarter.  Builders responded by starting more new homes during the second quarter than any time during the last five years”, said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office.  “It is likely homebuilders will start 22,000 homes in 2013, which is at the high end of our forecast”, said Brown. Starts in 2013 will still be almost 60% below the peak activity level in 2006. Construction activity is expected to continue to grow rapidly over the next two years due to the low supply of new and existing homes within the region, as well as strong job and population growth.

Even though builders started 32% more homes during the quarter, finished new home inventory fell 20% during the second quarter.  Finished vacant inventory is at a 20-year low and represents only a 1.7-month supply, well below the 2-month supply considered to be equilibrium.  New home prices are rising quickly with demand remaining strong and inventory low.  Some communities in the Metroplex have seen prices increase 10% to 20% or more during the first half of 2013.  Higher interest rates, however, may begin to slow the rate of price increases in the coming quarters.  “Buyer’s purchasing power has weakened somewhat in the past two months and will further erode if mortgage rates continue to rise.  This is likely to slow price increases over the next year”, said Brown.

New home starts were up the most for homes priced over $300,000.  The move-up price points have performed the best over the past three years due to low interest rates and strong housing affordability.  If interest rates continue to rise in the coming quarters, these trends may begin to shift to lower price points because of the weakened purchasing power.

New lot deliveries remained well below the starts pace during the second quarter, causing the lot supply to fall.  Although the total lot inventory represents a 29-month supply, the most active subdivisions (which account for 75% of the new home demand) have a very restricted 15-month supply. Equilibrium is considered to be in the 20 to 24-month range.   “The low lot inventory is continuing to push lot prices in the high demand locations” said Brown.  “If lot deliveries do not accelerate in the top submarkets during the second half of the year, the growth in starts may begin to slow due to supply constraints.” New lot development activity increased 12% during the second quarter with approximately 9,300 lots under construction.  75% of the lots are still in the road excavation stage of construction, suggesting it is unlikely new deliveries will jump significantly in the third quarter.  Therefore, lot supply is likely to become more constrained in the coming months.

The recovery continues to be led by the northern suburbs with North Fort Worth, Frisco and McKinney showing the largest increase in starts over the last year. Collin, Denton and Tarrant counties experienced the largest jump in starts during the second quarter.  The recovery has now spread to most of the counties in the Metroplex.

DFW Historical Housing Activity and Inventory

david b pr

For information contact:
David Brown @ 214.891.5602 or 214.207.7535
E-mail:davidb@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, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Tight Inventory, Price Increases and what’s Next?

Posted in Austin Market, Dallas - Ft. Worth Market, Houston Market, Rio Grande Valley Market, San Antonio Market | Posted on 06-05-2013 | Written by Brad Colliander

News reports during the last several weeks have highlighted that home prices are rising in the major Texas markets.  The price increases can be associated with increased demand for housing spurred by population growth, historically low interest rates and improving local economies.  With this increased demand for both new and resale homes, the supply of lots and homes has dropped below equilibrium levels.  Simple Supply and Demand economics teach us that as supply decreases, prices of remaining or replacement supply may increase.

Read the rest of this entry »

New home starts jumped 35% and closings increased 25% in the first quarter of 2013

Posted in Dallas - Ft. Worth Market | Posted on 04-04-2013 | Written by Metrostudy News

(Dallas, TX – April 4, 2013) Metrostudy reports the Dallas-Fort Worth new home market continued to expand rapidly during the first quarter of 2013.  “Homebuilders entered 2013 with the largest backlog of sales in years.  Consequently the year began with a significant jump in home starts”, said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office.  Homebuilders continue to report year-over-year gains in traffic and new contracts.  The start pace was the highest for a first quarter in five years and up 35% over 2012.  “It is likely homebuilders will start over 20,000 homes in 2013 for the first time in five years”, said Brown. “Starts in 2013, however, will still be 60% below the peak activity level in 2006.”  Construction activity is expected to continue to grow rapidly over the next couple of years due to the low supply of new and existing homes within the region as well as strong job and population growth.

Home prices in many communities are increasing rapidly due to the strong sales and the low level of new and existing homes for sale.  There were just over 3,000 finished vacant homes in the Dallas-Fort Worth region, less than half the inventory in 2008 (the last year builders started 20,000 homes) and a fourth of the inventory at the peak in 2006. Resale inventory is currently at a 3.4-month supply the lowest level in the last three decades.  “It’s not just the strong demand and low supply driving up prices; builders are getting hit with increased lot costs, construction costs and labor costs” said Brown.  “We expect to see new home prices jump more than 10% in good locations during 2013”

New home starts were up the most for homes priced over $200,000.  The near record low interest rates is driving home affordability and allowing buyers to purchase larger, more expensive homes.  “We have been seeing first-time homebuyers skip typical first-time product and purchase homes in what have historically been move-up price ranges”, said Brown.  The interest rates are allowing buyers to bypass a normal move-up level and purchase a larger and more expensive home.

The recovery has been led by the northern suburbs with Frisco and McKinney showing the largest increase in starts over the last year.  The recovery in the last six months has spread to most areas in the Metroplex.  The eastern suburbs of Rowlett, Rockwall, Fate, Forney, Kaufman County and Royse City reported a significant jump in starts during the last six months.  Grand Prairie, Crowley, Burleson and Southwest Tarrant County in the southern half of the Metroplex also saw an increase in starts during the quarter.

The increased starts pace and limited new lot development continues to drive down the lot inventory.  Lot supply has fallen to 32-months from a peak of 74-months.  The “A” locations currently only have a 13-month supply well below what is considered equilibrium.  The top performing developments that account for 75% of the activity within the region have only a combined 17-month supply.  This has led to an increase in new developments planned, primarily in the northern suburbs.

david brown chart pr

For information contact:
David Brown @ 214.891.5602 or 214.207.7535
E-mail:  davidb@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide.  In addition to providing information, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects.  Services are offered through an extensive network of offices strategically located in major metropolitan areas throughout the U.S.

01/31/13: Dallas BA Punch List

Posted in Dallas - Ft. Worth Market, Events | Posted on 01-31-2013 | Written by Metrostudy News

NEW LOGO 2013

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david 1-31

Are You Wondering What 2013

Brings for the Housing Market?


The Sales and Marketing Council will present “Forecast 2013″ featuring David Brown of Metrostudy. He will deliver an overview of the economy and housing markets in the United States and Texas, with additional projections on how the change in population and demographics will affect the Texas housing market.

Metrostudy is the nation’s leading provider of primary and secondary market information to the housing industry. David Brown is director of the DFW office of Metrostudy. He has 25 years of experience in the real estate industry including consulting, banking and appraisal.

Click Here to Register


Friday January 31,  2013

WHERE Atmos Energy Training Center in Plano

ADMISSION $20 when registering online by noon Jan. 31 and $25 at the door
AGENDA Registration and Breakfast at 8:30 a.m.

SPEAKERS David Brown Director of DFW Metrostudy

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