Home Builders Association Hosts 2019 Annual Housing Forecast
The Home Builders Association of Greater Austin hosted the 2019 Annual Housing Forecast on January 17 at the AT&T Center. The program featured presentations by Eldon Rude, Principal, 360° Real Estate Analytics, Mollie Carmichael, Principal, Meyers Research LLC, and Julia Coronado, President and Founder of MacroPolicy Perspectives. The most comprehensive housing forecast in the region, the HBA’s Annual Housing Forecast informed the crowd of over 700 HBA members, industry partners, guests, elected officials and the media about the current state of the housing industry, market forces influencing housing prices, and known indicators of what’s to come for the region.
- Robust job and population growth in 2018 resulted in another strong year for home builders in Central Texas (see stats below).
- New home sales in October and November fell below expectations due to several factors including a spike in mortgage interest rates, uncertainty over the midterm elections as well as extreme volatility in the stock market. Builders reported that sales rebounded in December.
- The greatest demand for new homes was in the $200,000 – $300,000 range; builders were forced to look further from Austin’s core to find land that would accommodate homes at this price point.
2019 Bottom Line:
Major tech companies will continue their drive for growth this year, and Austin has emerged as one of the key cities most attractive to the industry for expansion; this will keep tech workers flowing into Austin in 2019. With the prospects remaining positive for the local economy, I expect builders will have another strong year as they try and keep up with the demand for new homes.
The biggest challenge facing builders in our market is related to affordability issues linked to rising home prices and higher mortgage interest rates. This factor could serve to limit the upside in terms of how many homes we build in the Austin region in 2019.
Rising mortgage interest rates:
Any impact on the housing market from rising mortgage interest rates will be tied to how much they go up and how fast. Although interest rates are always an important factor to home buyers, history proves that if the job market is good, wages are increasing and home prices are going up, people will continue to buy homes. It’s all about confidence.
2018 stats of interest:
- Single-family home permits issued during 2018 approximated 16,000 units
o the highest level since 2006 when over 18,000 permits were recorded
o nearly a 4% increase over 2017 (and up over 150% from the recession low of 6,312 permits issued in 2011)
- Annual sales of previously-owned homes for the 12 months ending November 2018 in the Austin MSA totaled 34,818
o a 3.5% increase compared to the previous 12 months
- November 2018 median sales price for a previously-owned home = $299,900
o an increase of over 3% compared to December 2017
- November 2017 average sales price for a previously-owned home = $381,478
o an increase of over 4% compared to December 2017
- The months-of-supply of active listings for previously-owned homes in Austin has remained below four months for over six years – a primary reason for the sustained home price increases in the Austin region.
The HBA would like to thank our event sponsors
For those who attended the event, email email@example.com to request speaker presentations.