San Antonio New Home Industry Showing Strong Growth
(San Antonio, TX– May 21, 2013) Metrostudy reports the greater San Antonio new home market continues to exhibit strong growth during the first quarter of 2013. “Homebuilders entered 2013 with the strong demand and low inventory levels spurring the need for increased levels of construction.” reported Randall Allsup, Regional Director of Metrostudy’s San Antonio office. The start pace was the highest for a first quarter in five years and up 21% over 2012. “It is likely homebuilders will start over 9,000 homes in 2013 for the first time in five years. Starts in 2013, however, will still be 50% below the peak activity level in 2006,” said Allsup. Construction activity is expected to continue to grow over the next few years due to the low supply of new and existing homes within the region as well as strong job and population growth.
The San Antonio region is also experiencing rising home prices due to the stronger sales pace and the low level of new and existing homes for sale. There were just over 1,400 finished vacant homes in the San Antonio area, less than half the inventory just five years ago. Resale inventory is currently at a 5.4-month supply, a level that historically has indicated a sellers-market. “It’s not just the strong demand and low supply driving up prices; builders are getting hit with increased lot costs, construction costs and labor costs. We expect to see home appreciation of more than 3% this year, with new home prices jumping 10% or more in good locations during 2013,” said Allsup.
The near record low interest rates is driving home affordability and allowing buyers to purchase larger, more expensive homes, and the tightness of the mortgage market making it difficult for first-time homebuyers to qualify, are combining to diver the higher priced market as Metrostudy reports that the new home market priced above $300,000 has seen growth of 44% in the past year. “The good news is that well qualified first-time homebuyers have been able to skip typical first-time product and purchase homes in what have historically been move-up price ranges,” said Allsup. The historically low interest rates are allowing buyers to bypass a normal move-up level and purchase a larger and more expensive home.
The increased starts pace and limited new lot development continues to drive down the lot inventory. Lot supply has fallen to 25-months from a peak of 43-months. The “A” locations currently only have a 12-month supply well below what is considered equilibrium. The top performing developments that account for 71% of the activity within the San Antonio region have only a combined 14-month supply of developed lots. “The extremely tight supply of vacant developed lots, which has led to higher land and lots costs, has spurred increased levels in new development planning, a trend we expect to continue through the remainder of the year,” said Allsup.
For information contact:
randall allsup @ 210.525.9549
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
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