Dallas/Fort Worth, TX 2017 New Home Construction Report |
Posted: December 12, 2017 |
Dallas/Fort Worth, TX has a strong economy with steady growth that’s driving interest to the area. North Texas is predicted to rank among the top housing markets in the U.S. in 2018. It currently stands at second, coming in right behind Las Vegas. In a Dallas Business Journal interview, Realtor.com chief economist Danielle Hale stated that “Dallas housing recovered a bit faster than the rest of the country with a below average unemployment rate, which is a strong place to be today.” That recovery is the reason that the median home price in the market is up to $339,950. Developers Say Affordable Homes Are Harder to Find The Dallas/Fort Worth region was once known for its abundance of low-cost housing compared to markets of similar size. The area has changed since then. What was once affordable construction has gone up significantly in price. President of Altura Homes Donnie Evans expressed concern over the current situation: “I never thought I would live to see the day that this would happen.” His company built a 2,000 square foot home in Fate, a city located at the center of Rockwall County. What was once priced in the lower $120,000 range now costs $220,000 to $240,000 just four years later. The dramatic increase stems fromseveral factors, including high supply and labor costs and rising land costs. Finding new homes in an affordable price range is much harder in 2017. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index released in May puts Dallas among the top three markets in highest year-over-year gains. The average price of a home went up 8.6 percent between March of 2016 and the same month this year. Ted Wilson, Residential Strategies principal, performs market research in Dallas. He mirrored local builder’s concern over the lack of affordable housing. He explained that there were approximately 100,000 transactions for homes priced at $200,000 and under in 2007. A decade later, the area is only seeing total transactions of around 50,000. Record Construction Still Not Enough in Dallas/Fort Worth Construction of single-family homes in Dallas-Fort Worth was at a high for the region by the end of 2015. Despite the increased supply, the area was still short by more than 40,000 listings to meet demand. Wilson explained that 14,180 single-family homes were being built at the time, which represented a 7.2 month supply. It still wasn’t enough to meet the shortage in North Texas. Record rainfall caused setbacks for construction projects during spring of 2015. Weather and labor shortages forced delays that caused builder closings to drop15 to 20 percent lower than business plans predicted. Prices and mortgage rates were going up, which pushed developers to look to new communities for their next projects. One example is the Clements Ranch, a $250 million planned community building project in Forney. Builder Jim Mabrey stated that he plans to sell the homes starting in the lower $200,000 range. Labor Shortage Continues for Dallas/Fort Worth Builders Factors in 2015 set the stage for the following two years. The market has also had other outside influences, like Hurricane Harvey which destroyed areas along the Texas coast in August and September. The storm left billions of dollars in damage in its wake, but builders in the area came through mostly unscathed. After watching the storm closely, Wilson found that “Down in the Houston market, there is a real shortage of Sheetrock workers, painters, and flooring people. That really hasn’t translated to problems here.” The bigger issue for North Texas builders was the Great Recession. Many construction companies struggled to regain a foothold. Over half ended up leaving the business after the economic fall. Many suppliers and laborers followed suit and did not return to the industry, even after the economy began to recover. A lack of workers presents a difficult problem for builders who are anxious to meet today’s housing demand. Dallas/Fort Worth New Home Construction in 2017 North Texas will reach 30,000 single-family home starts this year, and for the first time since the housing bubble burst. Builders still face challenges when it comes to finding land, labor, and financing for new homes. Multi-family housing availability is growing throughout Dallas/Fort Worth, with most properties appearing to the north. The Dallas Morning News reported that around 30 percent of under-construction units priced at $50,000is in northern suburbs like Richardson, Allen/McKinney, and Frisco-Prosper. The largest of the current construction projects include two urban-style developments in Wade Park and Frisco Station. Despite the challenges of recent years, the future of homebuilding in North Texas is looking bright. According to Wilson, “The steady influx of workers should help sustain housing demand.”
|
||||||||||||||||
|