Austin-area home starts hit their highest level in six years in 3Q16, nearing the peak level that occurred in 2006, according to Metrostudy. Its survey of the Austin housing market showed a total of 4,067 home starts, near the 4,387 home starts that occurred 1Q06. The report stated the third quarter numbers imply a “ramping up” of spec inventory in order to meet year-end goals. The new home starts pace for the year is 13,402 units, the highest in almost nine years.
“Though Austin is growing more competitive given the recent and pending opening of new subdivisions as well as new builders in the market, overall the market is performing well,” said Vaike O’Grady, Regional Director of Metrostudy’s Austin market. “Demand shows no signs of easing, and supply is catching up.”
O’Grady said if there is a challenge, it is with finding the right mix of new homes. “The major bulk of activity in Austin is below $300k – which used to be a single family home on a traditional 60’-70’ wide lot.” She said the top ten builders that offered base price homes under $300k had 5,639 annual closings in the third quarter of 2016, which is nearly half of all new home sales. “The big winners so far in 2016 are the builders offering smaller product that meets the budget and lifestyles of emerging family types.”
New home closings for 2016 are up 18.4 percent year over year. Metrostudy reported that the bulk of the third quarter sales were in the north, which had seven of the top 10 subdivisions. Northwest was next, but the south also reported strong new home starts, with a 27 percent increase year over year.
The report read: “As 2016 ends, we can expect even more activity on the suburban edges … And the Central submarket continues to be a hub of teardown, infill activity, pushing prices northward. With no significant headwinds, and with growing offerings below $300,000, Austin is poised for a banner year.”