The Austin area’s housing market continued its hot streak in the second quarter, with home starts up 32 percent from the same period last year, a new survey shows.
The quarterly increase — 2,650 homes — bumped the annual starts tally to 9,027 homes in the 12 months that ended in June. That’s a 38 percent increase from the 12 months that ended in June 2012, according to research firm Metrostudy, which tracks the numbers.
In the first three months of this year, home starts were up 27 percent over the same quarter of 2012, Metrostudy said.
New-home demand in the Austin area continues to surpass supply due to the region’s mushrooming job and population growth, said Madison Inselmann,regional director of Metrostudy. The area has added jobs in each of the past 13 quarters, and that job growth has strengthened consumer confidence, which in turn has helped drive demand for housing.
“Now that Austin’s economy is firing on all cylinders, builders can’t finish homes fast enough to meet growing demand,” Inselmann said.
Since 2007, the Austin area has averaged 17,100 new residents a year, according to Metrostudy. More than 27,000 people are expected to move to the Austin area in each of the next three years, Metrostudy said.
“If a new home is not available within their timeline, they will rent or buy an existing home,” Inselmann said. “Either way, the new home market benefits as apartment occupancy rises and the supply of resale homes disappears.”
Gary Newman, president of Trio Development, a local land development company, said builders are searching for lots to build houses on, and said prices are going up quickly.
“I have heard of three to four new out-of-town builders trying to get established, and that will be challenging in this market,” Newman said by e-mail.
Trio is building in Northwoods at Avery Ranch in Northwest Austin, where 90 homes have sold since sales started in December and 60 are under construction. The price range is $220,000 to $600,000.
“This market, resale and new homes, is as hot as I have seen in Austin,” Newman said. “Also the jump in sales is in almost every price range; very rare.”
Bradley Pounds, a real estate agent with Watters International Realty in Austin, said homebuyers “by the hundreds” are turning their attention to the new homebuilders.
“After the financial crisis, distressed home inventory and nervous sellers made the resale market the place to go for a great deal. Now that resale prices are up and homes sell in multiple offers, it’s not so simple,” Pounds said. “The builders were smart, snapping up land (in the suburbs) when it was affordable and now those areas sell swiftly, as well. Since the demand is so high in Austin, it has a lot of people broadening their search area into the suburbs where the builders are very active.”
Currently, there’s a lot of pent-up demand in the market from renters who have been uncertain about purchasing, Pounds said.
“Procrastinating has put their purchasing power in jeopardy,” Pounds said. “What’s waiting for them in the market are increased prices, rising interest rates and competition from other buyers. And those things are only going to get more challenging.”