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Market News and Trends

Homebuilders coming back – another sign of strength


Several reports recently have indicated that homebuilders are seeing a better future than they have over the past few years.  Here’s are some good summaries:

Homebuilder confidence reaches 6-year high

US housing construction jumps to 4-year high

As with most of this market recovery, Austin gained momentum ahead of most other cities.  You can see the local confidence reflected in building permits beginning as early as January 2012 (click image to enlarge):

Pay special attention on that chart to newly permitted multifamily dwellings (5+ Family).  Compare 2012 to 2011:

Single family permits are up a healthy 30% compared to the same time last year, but the 5+ Family segment is already almost 70% ahead of last year’s 12-month total!  (And almost 3X the same-time YTD total!)

A long-term view of permitting activity puts this in perspective, however:

Look at Single Family permits (blue bars) in 2011 compared to the last three market peaks in 1984, 2000, and 2006.  Volume would have to triple this year to match the 2006 peak.  Multifamily permits, on the other hand, by the end of August had almost matched the full peak year for that segment.

Notice that the last real “boom” in building duplexes and fourplexes was in the mid-1980s.  The “boomlet” in the last cycle was much smaller — a 5-year (2003 to 2007) total of permitted units 1/3 the total from 1981 to 1985.  This is a negligible segment as new construction becomes a significant contributor to our residential market.  Even though permits in this segment are up almost 150% compared to last year, the total in 121 units this year — about 1% of the newly permitted units in the Single Family and 5+ Family arenas.

Permits and actual construction can be two very different things, but it appears that the confidence is in place to makes these plans real.  I’ll keep an eye on permits and monitor reports of ground breaking and grand openings, and keep you informed.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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