Why finding housing in booming D-FW market is so difficult (5/06/16)
By Steve Brown
About 80,000 people moved to North Texas last year, or more than 200 newcomers a day.
Unless local folks are renting out space in their attics, I don’t know where all these new people are going to live.
We’ve been underbuilding housing in North Texas since the end of the recession.
And there’s no sign that the shortage of homes in the Dallas-Fort Worth area will ease — at least not as long as our economy is blazing hot.
Last year, D-FW had the second-highest residential construction total of any U.S. market, according to just-released data from the U.S. Census Bureau. Builders filed permits for more than 57,000 D-FW homes, apartments, condos and townhouses.
Only New York City, with 86,424 building permits, had more residential construction.
In D-FW, slightly more than half of the permits recorded in 2015 were for single-family homes. The rest went for apartments.
Apartment construction in North Texas is at the highest point in decades, and there are plenty of rental units on the way for the thousands of young professionals coming to the area to work for State Farm Insurance, Toyota, Liberty Mutual Insurance and others.
But the tight inventory that has frustrated would-be homebuyers for more than two years shows no sign of a thaw.
The inventory of homes listed for sale with real estate agents in North Texas is stuck near a two-month supply. That’s about a third of what’s considered a normal market.
Even with steady increases in construction, home starts in the D-FW area remain about 40 percent below where they were 10 years ago.
Builders had about 30,000 home starts in 2015.
“We won’t see the Dallas-Fort Worth homebuilding market get back to the 2005-06 level of 50,000-plus starts anytime soon,” said David Brown, senior vice president of housing analyst Metrostudy Inc. “The region’s population, household and job growth trends could support starts in excess of 40,000 homes during this cycle, but only if builders can deliver homes at prices the buyers can afford in the locations they want to live.”
Most of the houses built in Dallas-Fort Worth are expensive properties aimed at move-up and affluent buyers.
“Back in 2006, over 60 percent of the new home starts were priced under $200,000,” Brown said. “Today less than 20 percent of the starts are at these most affordable prices.”
Also, a shortage of labor, affordable building sites and rising construction costs are keeping a lid on how many houses builders can produce each year.
The housing industry won’t build its way out of the current property pinch.
And homebuyers who head out to house-hunt this spring are finding a cutthroat market with bidding wars for choice properties.
Apartment developers are doing their part to put roofs over everybody’s head. More than 40,000 rental units are in the development pipeline in North Texas.
But apartment analysts say don’t expect a lot more construction volume from the apartment builders. Indeed, they may be pulling back a bit.
“The number of apartment units permitted in Dallas-Fort Worth so far during 2016 — roughly 4,700 units — is off 20 percent or so from early 2015’s volume,” said Greg Willett, vice president of MPF Research. “While those figures can move around a lot from one month to the next, the numbers do suggest we’re now past the peak for starts.” http://www.dallasnews.com/business/columnists/steve-brown/20160506-steve-brown-why-finding-housing-in-booming-d-fw-market-is-so-difficult.ece