Austin housing starts for the first quarter of 2018 were up 17.6 percent compared to the first quarter of 2017, for a total of 4,064 housing starts, according to Metrostudy. Annual new home starts increased 4.5 percent to 16,457. Attached homes, generally more affordable than single family homes, have seen significant gains, with 353 percent growth in the last five years.
New homes also are selling more quickly, and closings have outpaced housing starts for the last two quarters. In the first quarter of 2018, there were 4,118 closings, compared to 3,108 in 2017, a 32.5 percent increase. Annual closings increased 15.1 percent, from 13,634 after the first quarter of 2017 to 15,699 after the first quarter of 2018.
Metrostudy’s Austin Regional Director Vaike O’Grady says new construction homes are concentrated in the major commuting routes in the greater Austin area. “The top three align with Highway 130, but several submarkets served by I-35 and the 183A toll road also make the top ten for quarterly start performance.”
O’Grady said, “The fuel for the market is in the $200,000 to $300,000 price range. That segment generated 8,104 single family/townhome/plex starts during the past 12 months, making up more than half of that market.”
Vacant developed lots are at an 18.2 month supply, with a target of 20 to 24 months being the equilibrium. This follows a 3.9 percent increase compared to the first quarter of 2017. The tightest submarkets are Southeast Austin with 7.7 months, Del Valle with 10.9 months, Manor with 12.2 months, and Round Rock West with 12.4 months.
O’Grady said, “Austin continues to ride the wave of buyer demand into the spring selling season, and many builders are reporting record sales. The challenge is on the operations side, where managing increasing construction costs (for both materials and labor) has become critical to builder performance.”