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
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 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%.

1

“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, 12.1% of annual starts were priced below $150,000 as of 1Q12. That proportion has decreased to 6.0% as of 1Q14. During the same period, starts of homes priced greater than $300,000 grew from 28.6% to 42.0%.

2

“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%.

4

“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.

5

“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.

Metrostudy Market Analysis: Dallas/Fort Worth Market

Posted in Dallas - Ft. Worth Market, National Housing Market | Posted on 06-30-2014 | Written by David Brown

Are the days of being able to purchase a new home in Dallas-Fort Worth under $200,000 soon to be gone?

At Hanley Wood’s Housing leadership summit last month I spoke about how the housing recovery has been led by the move-up price points.  I also spoke about the supply constraints facing the Dallas-Fort Worth market and how it is rapidly driving up the price of lots and new homes.  Builders and developers have appropriately focused their new developments in the move up price ranges.  Starts are now back to the peak level of 2006 for homes priced over $300,000 and lot deliveries are exceeding the starts pace in the $350,000 to $750,000 price range.  It has to make you question if the market can support continued significant growth in these move up price points.  Will we begin to see the starts activity flatten in the coming quarters for homes priced over $300,000?

Conversely, only 2% of the lot deliveries in the last twelve months were for homes priced under $200,000, yet 25% of the starts in the last year were for homes priced under $200,000.  Lot inventory for homes priced under $200,000 has dropped from 55,000 lots in 2005 to 13,000 lots in 2013, and they aren’t being replaced.  At the current starts pace these remaining lots will be gone in a little over two years.  As time goes by it will become more and more difficult to replace these lots because of higher land prices and development costs.  Will homebuyers who can only afford an $180,000 home be forced to buy an existing home or stay in a rental?  Will we see higher density development or smaller home sizes and higher lot to home price ratios?

What are your thoughts?

Metrostudy Markets Analyses at the 2014 Housing Leadership Summit

Posted in Dallas - Ft. Worth Market, Houston Market, Las Vegas Market, National Housing Market, Northern California Market, Raleigh - Durham Market, South Florida Market, Tampa Market | Posted on 06-02-2014 | Written by Metrostudy News

The housing recovery hasn’t been a one-size-fits-all proposition. In Northern California, affordability remains a constant hurdle, while Tampa, Fla., and Las Vegas are clawing their way back after dramatic losses during the recession. In Dallas and South Florida, the markets are so strong that builders are being forced to come up with creative ways to manufacture lots. Raleigh, N.C., is also experiencing shirking supply but has recovered all of the jobs lost during the recession. And in Houston, buoyed by the strong energy sector, home prices have risen 17%. These were just some of the observations that came out from Metrostudy’s regional directors at Hanley Wood’s Housing Leadership Summit in Dana Point, Calif., in May. Check out the videos from the discussion below.

Watch Full Videos Here

Metrostudy reports new home starts jumped 27% and closings surged 14% in the first quarter of 2014

Posted in Dallas - Ft. Worth Market | Posted on 05-07-2014 | Written by Metrostudy News

May 7, 2014: Metrostudy reports homebuilders started 27% more homes in the first quarter of 2014 than the prior year. “We were surprised by the large jump in starts during the quarter”, said David Brown, Regional Director of Metrostudy’s Dallas-Fort Worth office. “We are only expecting a 10% to 15% increase in starts during 2014 based on the availability of lots and our client’s plans for the year. Part of the large first quarter increase was caused by weather and lot delivery delays during the fourth quarter of last year pushing some starts into this year.” Starts during the first quarter were the highest they have been since 2007 in the region. Metrostudy expects the growth pace to slow somewhat through the remainder of the year because of low lot inventory and higher home prices in prime submarkets.

Builders continued to report delays in completing homes during the quarter due to a shortage with many trades. The extended construction timeline negatively impacted the number of closings for the quarter, leading to only a 14% increase in closings compared to a year earlier. “Supply constraints have been the headline story in the homebuilding business over the last year and a half and will likely remain the story in 2014”, said Brown. The tight supply is extending the construction cycle and driving up construction costs, lot costs and ultimately home prices.

Options for homebuyers continue to remain limited as the spring selling season kicks into gear. Finished new home inventory is 10% below the prior year and represents only a 1.7-month supply, below the 2-months considered to be equilibrium. Additionally, the existing home market has only a 2.6-month supply of homes on the market, the lowest level in over twenty years. The low inventory points to another very tight market through the spring and summer. “Homebuyers this spring are being greeted with fewer choices and much higher prices than a year ago. They won’t find certain price points available in neighborhoods that were available last year. It will force them to look at other locations to find a home within their budget” said Brown.

Lot development activity picked up substantially in the Metroplex with lot deliveries up 25% over the 4th quarter and 43% higher than a year ago. This is the first quarter since 2007 that lot deliveries met the starts demand. However, the newest generation of lot prices is continuing to rise substantially and will continue to put upward pressure on new home prices in the coming quarters. 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 2014, 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 at the end of the quarter. Thus it is unlikely lot inventory will jump in the coming quarter.

2014 is expected to be another strong year for homebuilding activity, but the growth rate will likely 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.

For information contact: david brown @ 214.891.5602 or 214.207.7535

email 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 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.

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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fwba

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

david b

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