City of the Future
Where everyone yearns to live: Houston No. 1 in the nation in new home construction
LAS VEGAS – Houston led the nation in single-family home construction in 2013, with a significant lead over the No. 2 market, Dallas, according to Metrostudy, a housing consulting firm.
Last year, Houston area home builders accounted for 28,339 housing starts, followed by Dallas-Fort Worth at 21,200 and No. 3 Atlanta with 13,119 starts.
“The energy belt metropolitan areas have done very well because their underlying economy has improved so quickly. So housing has come back strongly in most of the Texas markets, Houston in particular, “ says David Crowe, chief economist of the National Association of Home Builders.
The key to Houston’s home building boom is job growth, Crowe told CultureMap in an interview at the International Builders Show in Las Vegas. With energy firms, such as Exxon Mobil and Chevron moving employees to Houston, the city added 80,000 new jobs last year.
With tight supply and high demand, Houston consumers should expect to pay more for a house in 2014.
Houston may not hold onto the top spot in home building forever. But builders in the Bayou City will have excellent sales for quite a while.
“It peters out at some point, but I think that is still several years away,” Crowe says. “There’s still good strong job growth.”
Rounding out the Top 10 for housing starts last year were: Washington, Phoenix, Austin, Orlando, San Antonio, Miami and Charlotte.
As a whole, 2014 looks better for the nation’s home building industry, even in many of the weaker markets, says Brad Hunter, chief economist for Metrostudy.
“The housing recovery is still in its infancy and a lot of growth is coming,” Hunter says.
The downers persist. Higher mortgage interest rates are a drag on the housing market, credit is hard to obtain for first-time homebuyers and few cities have job-growth booms similar to Houston’s. But on a national basis, the industry is coming off catastrophic lows and some big gains are coming. The “percentage gains” are going to be eye popping.
Last week in Las Vegas, the National Association of Home Builders released a bullish forecast for 2014. The NAHB is predicting the nation will have a 32 percent increase to 822,000 single-family home starts in 2014, followed up by a 41 percent gain in 2015.
In Houston, the market has faced a shortage of labor and lots. Construction tradesmen left the industry during the crash and land developers didn’t crank up their lot creation machines soon enough to supply lots for this latest boom.
Houston builders sold 25,627 new homes last year, up 13 percent from 2012, Metrostudy reported. Houston home starts were up 20 percent in 2013, over 2012, as builders accelerated the construction pace to meet demand.
The inventory of available homes is low in Houston. Builders have very few completed homes for sale in Houston, says David Jarvis, regional director for Metrostudy in Houston. And at year-end, the Houston Association of Realtors reported record-low inventory of existing homes for sale. With tight supply and high demand, Houston consumers should expect to pay more for a house in 2014.
“Tight supplies of available housing historically leads to home price appreciation,” Jarvis says, “and prices in housing are rising quickly in both new and resale homes.”
Ralph Bivins, former president of the National Association of Real Estate Editors, is founding editor of RealtyNewsReport.