Housing affordability a concern but not expected to hinder growth of local new home sales
Strong job market, cultural draw and great home design are direct contributors
Austin, Texas (July 8, 2015) Today, the Home Builders Association of Greater Austin held its annual Mid-Year Housing forecast at the Phillips Event Center near downtown Austin for a sold-out crowd of 350 HBA members and industry partners. The program gives the HBA’s members a snapshot of how the industry is shaping up and insights on what to expect for the remainder of 2015 and into 2016. Tim Sullivan of Meyers Research, a Kennedy Wilson Company, presented his analysis of trends, concluding that with the Austin area’s solid job growth, downtown center transformation, superior new home design and “keep Austin weird” cultural draw, the area will enjoy a healthy, robust new home market with steady price appreciation of 3 percent (conservatively).
“With job growth of 30,000 to 40,000 new jobs in the Austin area over the last few years and a 3-4 percent unemployment rate, new home sales will stay on the rise for at least the next two years,” says Sullivan.
Sullivan championed Austin’s ratio of 8:1 resale home sales to new home sales as a primary benchmark that illustrates the overall health of the new home market; comparing to cities like New York where the ratio is 35:1.
“Affordability is trending downward but is still better than 75 percent of the country,” says Sullivan. For example, one could purchase a 2,546 square foot home on a 9,000 square foot lot in the Austin area for $475,000; in San Diego, for $479,000, one could buy a 1,600 square foot home on a 4,000 square foot lot.
Austin ranks fifth in the nation for active subdivisions with four of the top six markets in Texas. The large increase of professional and business service jobs locally, which tend to garner higher salaries, are expected to fill the gap between income growth and home prices in the region according to Sullivan.
Tim has more than 32 years of experience in analyzing and valuing real estate development opportunities. He has developed the ability to interpret diverse statistics and trends and translate them into actionable plans.
During his career, Tim was senior manager with KPMG Peat Marwick’s National Real Estate Consulting Group before serving as principal of Hanley Wood Market Intelligence’s (formerly The Meyers Group) Real Estate Consulting Practice and his own firm. He earned an MBA with a concentration in marketing and finance from San Diego State University, and a bachelor’s degree in economics from University of California, San Diego. He also holds a MIRM (Member of the Institute of Residential Marketing) from the National Association of Home Builders.