The clients of Austin Metrostudy are builders and related industries. “Our survey team drives over 8,500 miles and over 1,000 subdivisions every 90 days to provide you with the valuable information you need on future lots, vacant developed lots, homes under construction, and homes that have been completed.”
A representative of the company made a presentation to a group of REALTORS® on Friday and I will give you a brief report from the 5-county Austin area, and the Dripping Springs/Driftwood area, in particular.
Overall job growth in the Austin area has fallen from 45,000 new jobs/year created in 2015 to 30,000 new jobs/year created currently. However, with growth of 30K annually, it is still a hot job market and demand for homes is up with available inventory down. What does this mean? Rising home prices and a real affordability issue for the City of Austin. For the home-buying population in general, the good news is that annual salaries in the Austin area are $20,000 higher than other parts of the country.
New home builders have caught on to the affordability issue and, not wanting to leave any part of the home-buying field fallow, they are building less-expensive homes in the following ways: the homes are being built on smaller lots to reduce the price of land being used per house; some homes have fewer bells and whistles to make construction less expensive; and subdivisions are being developed farther from the city center where the land is cheaper for the developer to buy.
Builders are now experiencing a decided downturn in available workers, so a new house is taking longer to build, including most custom homes. There are fewer workers available to do the same amount of work.
There are certain pockets that have unique building situations, and my home area, Dripping Springs, is one. The land is hilly, so it is naturally more expensive to build on than flat farming lots are. Also, if you recall from my post about septic systems, neighborhoods in this area need to have their own sewage treatment plant, or each home must have extra acreage to accommodate an individual septic system. More land per home= higher price per home. The other unique aspect of the Dripping Springs area is that it is scenic; many lots have expansive views, which, of course, drives up the home prices.
The observed numbers for 2016, fourth quarter are: 473 new home started, and 378 homes sold/transactions closed. There are 2.9 months of inventory in the area (6 months or so is considered a balanced market, with about the same number of homes on the market as buyers looking for a home.). The number of vacant developed lots (the ‘hood has streets and utilities in place) is equal to a 32.8 month supply. There were 741 new lots in 2016, with 8000 future new lots on the books. 1000 of those have streets in, or excavation has started. The average base price for a new home in the Dripping Springs area is $458,000, and this number has not risen recently.
I love to keep track of new homes in this area, whether they are truly luxurious, or less expensive, but thoughtfully planned. One new subdivision with prices well below average is easily in walking distance from the business area of Dripping Springs, as well as from an established historic park. Also, see my post on the truly custom homes in Driftwood.