Texas Housing Insight - Cathy Crowe's...

TEXAS HOUSING INSIGHT

LUIS B. TORRESRESEARCH ECONOMIST

JAMES P. GAINESCHIEF ECONOMIST

WESLEY MILLERRESEARCH ASSISTANT

TR T E C H N I C A L R E P O R T

M A R C H 2 017

2 1 2 0

Contents

AboutthisReport.............................................................................................................2

January2017Summary....................................................................................................3

Supply..............................................................................................................................3

ResidentialConstructionCoincidentandLeadingIndicator............................................................3

Single-FamilyHousingConstructionPermits...................................................................................3

MajorMetrosSingle-FamilyHousingConstructionPermits............................................................4

HousingStarts..................................................................................................................................4

TotalNewPrivateSingle-FamilyConstructionValue.......................................................................5

MonthsofInventory........................................................................................................................5

TexasMonthsofInventorybyPriceCohort.....................................................................................6

MajorMetrosMonthsofInventory.................................................................................................6

Demand...........................................................................................................................7

HousingSales...................................................................................................................................7

TexasHousingSalesbyPriceCohort................................................................................................7

MajorMetrosHousingSales............................................................................................................8

30-YearMortgageRateand10-YearBondYield..............................................................................8

TexasHomesDaysonMarket..........................................................................................................9

MajorMetrosExistingHomesDaysonMarket................................................................................9

MajorMetrosNewHomesDaysonMarket...................................................................................10

Prices.............................................................................................................................10

UnitedStatesExistingandNewHomeMedianSalesPrice............................................................10

TexasExistingandNewHomeMedianSalesPrice........................................................................11

MajorMetrosExistingHomeMedianSalesPrice..........................................................................11

MajorMetrosNewHomeMedianSalesPrice...............................................................................12

TexasHomeMedianPricePerSquareFoot...................................................................................12

MajorMetrosExistingHomeMedianPricePerSquareFoot.........................................................13

MajorMetrosNewHomeMedianPricePerSquareFoot..............................................................13

TexasHomeSalePricetoListPriceRatio.......................................................................................14

MajorMetrosExistingHomeSalePricetoListPriceRatio............................................................14

MajorMetrosNewHomeSalePricetoListPriceRatio.................................................................15

2

AboutthisReport

RealEstateCentereconomistscontinuouslymonitormanyfacetsoftheglobal,national,andTexas

economies.TexasHousingInsightisasummaryofimportanteconomicindicatorsthathelpdiscern

trendsintheTexashousingmarkets.Percentagechangesarecalculatedyear-over-year,unless

statedotherwise.

ThismonthlypublicationprovidesdataandinsightsontheTexashousingmarkets.Wehopeyou

findthemuseful.Yourfeedbackisalwaysappreciated.Sendcommentsandsuggestionsto

[email protected].

Dr.JamesGaines,Dr.LuisTorres,andWesleyMiller

Data current as of February 28, 2017

© 2017, Real Estate Center. All rights reserved.

3

January2017Summary

TheTexashousingmarketadvancedinJanuaryasoveralleconomicconditionsremainedfavorable.

Energypricesappreciatedanddomesticoilproductionincreased.Manufacturingandservicesector

activityalsoexpandedinTexas.Demandforhousingwasstrongerintheexistinghomemarketas

consumerssearchedforlower-costoptions.Supplyremainedconstricted,especiallyforhouses

under$300,000.Thecombinationofstrongdemandandtightsupplydrovehousingpricesupwards

acrossthehousingmarket.

Supply

TheTexasResidentialBusinessCycle(Coincident)Index,whichmeasurescurrentconstruction

activity,increasedmarginallyinJanuaryduetorisingsingle-familyhousingconstructionvalues.The

TexasResidentialConstructionLeadingIndex(RCLI),whichsignalsfuturedirectionalchangesinthe

residentialconstructionbusinesscycle,increasedtoaneight-monthhighbecauseofincreased

housingstartsandweightedbuildingpermits.

Single-familyhousingconstructionpermitsinTexasincreasedto8,935inJanuary—a25.6percent

increase.TexasledtheU.S.inpermitsandaccountedforover18percentofthenationaltotal.

Houstonremainedthenationalmetropolitanleaderinmonthlypermitsissued(2,982),while

Dallas-FortWorth(2,540)andAustin(1,244)rankedsecondandsixth,respectively.PermitsinSan

Antonio(660)spikedup47.0percent,followinglargeincreasesinNovemberandDecember.

Housingstarts,whichgenerallylagconstructionpermitmovements,increasedinTexasandthe

U.S.,reversingasix-monthdownwardtrend.Texassawastatewidemonthlyincreaseof52.6

percent*and28.1percentgrowthyear-over-year.

ThemonthsofinventoryintheU.S.hasbeenstableat4.3months*sinceNovember2016;around

6.5monthsofinventoryisconsideredabalancedhousingmarket.InventorylevelsinTexas

remainedtightataround3.7months*—thestatewideaveragesinceJune2014.TheTexasUrban

Trianglesawminimalinventorymovement.MonthsofinventoryinAustin(2.5months),Dallas(2.2

months),andFortWorth(2.1months)remainedbelowtheTexasaverage.SanAntonio(3.4

months)andHouston(3.7months)hadinventoriesthatwerecomparabletothestatewidelevel.

Since2011,themonthsofinventoryforhomesunder$300,000hassteeplydeclined.Increasing

inputcostshaveledhomebuilderstoprioritizethehigher-endmarket.Astheeconomyprogresses,

thesupplydifferencesbetweenpricecohortsshouldbegintomovetowardsnormallevels.

Demand

InJanuary,overalleconomicgrowthledtoincreasedhousingdemand.Totalhousingsalesrose4.1

percentinTexasand5.9percentnationally.Statewidesalesonhomespricedbetween$200,000

and$400,000increasedover14percentbutfell6.8percentforhomesunder$200,000.Weak

supplystuntedsalesforlow-pricedhousing.Thelownumberofdaysthathouseswereonthe

marketillustratesthestrengthofdemand.

4

TotalhousingdemandvariedthroughoutthemajorTexasmetropolitanareas.SalesinAustinand

SanAntoniorose7.8percentand9.7percent,whileDallas’salesgrewmodestlyat2.9percent.

SalesinHoustonstagnated(0.4percent)asthehousingmarketcontinuedtolagtheenergy

sector’srecovery.FortWorth’shousingsalesfellmarginallyat0.1percent.

Consumer-friendlyinterestratescontributedtoJanuary’sstrongdemandforhousing.Interestrates

tickeddownwardforthefirsttimeinsixmonths.TheFederalHomeLoanMortgageCorporation

30-yearfixed-ratedropped5basispointstoa4.2percentaverage.Theten-yearU.S.Treasury

bondyieldincheddown6basispointsto2.4percent.Interestratesareexpectedtorise

throughout2017astheFederalReserveplanstoraisethefederalfundsratetocombatinflationary

pressuresandfromstrongerloandemand.

ThemarketforexistinghomescontinuedstronginJanuary.Theaveragenumberofdayson

market(DOM)forexistinghomesdecreased2.2percent*month-over-monthto51days.TheDOM

fellto51daysinAustinand55daysSanAntonio.Dallashadthestrongestdemandforexisting

homes,wheretheDOMwasjust39days.ExistingDOMincreasedinFortWorthandHoustonto42

daysand57days.

DemandfornewhousinginTexaswasrelativelyweakerashomebuyersshiftedconsumption

towardsexistinghomestocombatrisingprices.ThenewhomeDOMrose3.4percentto90daysin

Texas.FortWorth(82days)andHouston(98days)experiencedanincreaseintheDOMfornew

homesforthethirdconsecutivemonth,indicatingnewhousingdemandremainedonitsdownward

trend.DemandfornewhousinginDallasandAustinwasstableinJanuary;theDOMfell3.6

percentinDallas(79days)andwasconstantinAustinrelativetoJanuary2016(92days).San

Antoniosawanabnormallyhighyear-over-yearincrease(29.9percent)intheDOMfornewhomes

(thelowvalueforJanuary2016isconsideredanoutlier).However,the4.7percent*monthly

increaseindicatesdemandhasonlyslightlyweakened.

Prices

Overall,salespriceshaverisensteadilyinTexassincelate2011.InJanuary,medianpricesfornew

andexistinghomesrose4.1percentand7.5percent,respectively.Priceappreciationforexisting

homesoutpacedthatofnewhomesthroughoutthemajormetropolitanareasinTexas.Thelargest

differenceoccurredinDallas,wherethemediansalespriceforexistinghomes($245,000)grew9.1

percentfasterthanfornewhomes($339,945).Similarly,themedianpriceforexistinghomesin

FortWorth($190,950)grew8.2percentfaster.Austinwastheonlymajormetrowherenewhome

pricesappreciatedmorethanexistinghomeprices.

Austinclearlyledthemajormetrosintermsofmedianpricepersquarefootforbothnewand

existinghomes.ThemedianpricesfornewandexistinghomesinAustinwere$18(13.8percent)

and$23(20.5percent)morepersquarefootthaninothermajorTexasmetros.However,median

*Seasonallyadjusted

2

pricespersquarefootinDallasandFortWorthhavesteadilygrownoverthepast12monthsand

havereducedthegapbetweenAustinandtherestofthestate.

Since2011,thestatewidemediannewhomepricehasexceededtheexistinghomepriceby47.3

percentonaverage.Thispricedifferentialstemsfromincreasesinhomesizeandlandcostsfor

newhousing;themediansquarefeetfornewhomeshasincreasedfrom2,275in2011to2,351.

Additionally,themedianpricepersquarefootforanewhomeinTexaswasapproximately15.6

percenthigherthanforanexistinghome.

Thestatewidedifferencebetweenthelistingpriceandthesalespricefornewhomesfellatthe

startof2014buthasnowflattenedasthedemandfornewhomeshaseased;alowerratio

indicatesabuyer’smarket.Conversely,thisratiohasincreasedsteadilyforexistinghomessince

2011.Since2015,thesalepricetolistpriceratiohasconvergedinthenewandexistingmarkets

around0.96.

3

Supply

Note:Seasonallyadjustedanddetrended.

Sources:RealEstateCenteratTexasA&MUniversityandFederalReserveBankofDallas


Sources:U.S.CensusBureauandRealEstateCenteratTexasA&MUniversity

40.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

TexasCoincidentIndex

UnitedStatesCoincidentIndex

TexasLeadingIndex

20

30

40

50

60

70

80

90

100

110

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

UnitedStates Texas

Single-FamilyHousingConstructionPermits

(IndexJan2007=100)

ResidentialConstructionCoincidentandLeadingIndicator

(IndexJan2007=100)

4

Note:Seasonallyadjustedanddetrended.FortWorthismissingdataforSomervellCounty.

Sources:U.S.CensusBureauandRealEstateCenteratTexasA&MUniversity


Sources:U.S.CensusBureauandBankofTokyo-MitsubishiUFJ

20

30

40

50

60

70

80

90

100

110

120

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington

Houston-TheWoodlands-SugarLand

SanAntonio-NewBraunfels

30

40

50

60

70

80

90

100

110

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

UnitedStates Texas

MajorMetrosSingle-FamilyHousingConstructionPermits

(IndexJan2007=100)

HousingStarts

(IndexJan2007=100)

5

Note:Inflationadjusted.Seasonallyadjustedanddetrended.

Source:DodgeAnalytics

Note:Seasonallyadjustedanddetrended.MonthsofinventoryfortheUnitedStatesisestimatedusingweightsforallexisting

homesandnewsingle-familyhomes;newnon-single-familyhomesarenotincluded.Texasincludesallexistingandnewhomes.

Sources:U.S.CensusBureau,NationalAssociationofRealtors,andRealEstateCenteratTexasA&MUniversity

30

40

50

60

70

80

90

100

110

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

TexasAustin-RoundRockDallas-FortWorth-ArlingtonHouston-TheWoodlands-SugarLandSanAntonio-NewBraunfels

3

4

5

6

7

8

9

10

11

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

UnitedStates Texas

MonthsofInventory

(Months)

TotalNewPrivateSingle-FamilyConstructionValue

(IndexJan2007=100)

6


Source:RealEstateCenteratTexasA&MUniversity



30

45

60

75

90

105

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

$0-$199,000 $200,000-$299,999

$300,000-$399,999 $400,000-$499,99

$500,000+

1

2

3

4

5

6

7

8

9

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRockDallas-Plano-IrvingFortWorth-ArlingtonHouston-TheWoodlands-SugarLandSanAntonio-NewBraunfels

MajorMetrosMonthsofInventory

(Months)

TexasMonthsofInventorybyPriceCohort

(IndexJan2011=100)

7

Demand

Note:Seasonallyadjustedanddetrended.SalesfortheUnitedStatesincludeallexistinghomesandnewsingle-familyhomes;

newnon-single-familyhomesarenotincluded.Texasincludesallexistingandnewhomes.

Sources:U.S.CensusBureau,NationalAssociationofRealtors,andRealEstateCenteratTexasA&MUniversity

Note:SeasonallyadjustedsalesreportedbyMLSanddetrended.

Source:RealEstateCenteratTexasA&MUniversity.

55

60

65

70

75

80

85

90

95

100

105

110

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

UnitedStates Texas

50

75

100

125

150

175

200

225

250

275

300

325

350

375

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

$0-$199,000 $200,000-$299,999

$300,000-$399,999 $400,000-$499,99

$500,000+

HousingSales

(IndexJan2007=100)

TexasHousingSalesbyPriceCohort

(IndexJan2011=100)

8

Note:SeasonallyadjustedsalesreportedbyMLSanddetrended.


Note:Seasonallyadjusted.

Sources:FederalHomeLoanMortgageCorporationandFederalReserveBoard

55

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



1.00

2.00

3.00

4.00

5.00

6.00

7.00

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Mortgage Bond

MajorMetrosHousingSales

(IndexJan2007=100)

30-YearMortgageRateand10-YearBondYield

(Percent)

9

Note:Seasonallyadjustedanddetrended.Forsingle-familyhomes.




50

60

70

80

90

100

110

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

ExistingHomeDaysonMarket

NewHomeDaysonMarket

25

35

45

55

65

75

85

95

105

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRockDallas-Plano-IrvingFortWorth-ArlingtonHouston-TheWoodlands-SugarLandSanAntonio-NewBraunfels

MajorMetrosExistingHomesDaysonMarket

(Days)

TexasHomesDaysonMarket

(Days)

10



Prices


Source:FederalReserveBankofSt.Louis

70

80

90

100

110

120

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock Dallas-Plano-Irving

FortWorth-Arlington Houston-TheWoodlands-SugarLand


160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

320,000

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

ExistingHomeMedianSalesPrice

NewHomeMedianSalesPrice

MajorMetrosNewHomesDaysonMarket

(Days)

UnitedStatesExistingandNewHomeMedianSalesPrice

($)

11





130,000

150,000

170,000

190,000

210,000

230,000

250,000

270,000

290,000

310,000

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

ExistingHomeMedianSalesPrice

NewHomeMedianSalesPrice

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock Dallas-Plano-Irving

FortWorth-Arlington Houston-TheWoodlands-SugarLand


MajorMetrosExistingHomeMedianSalesPrice

($)

TexasExistingandNewHomeMedianSalesPrice

($)

12





170,000

210,000

250,000

290,000

330,000

370,000

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



70

75

80

85

90

95

100

105

110

115

120

125

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

ExistingHomeMedianPricePSF

NewHomeMedianPricePSF

MajorMetrosNewHomeMedianSalesPrice

($)

TexasHomeMedianPricePerSquareFoot

($)

13





60

70

80

90

100

110

120

130

140

150

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



75

85

95

105

115

125

135

145

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



MajorMetrosExistingHomeMedianPricePerSquareFoot

($)

MajorMetrosNewHomeMedianPricePerSquareFoot

($)

14





0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

ExistingHomeSale-to-ListPriceRatio

NewHomeSale-to-ListPriceRatio

0.90

0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



MajorMetrosExistingHomeSalePricetoListPriceRatio

(%)

TexasHomeSalePricetoListPriceRatio

(%)

15



0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

1.00

Jan-11

Jul-11

Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Austin-RoundRock

Dallas-Plano-Irving

FortWorth-Arlington



MajorMetrosNewHomeSalePricetoListPriceRatio

(%)

i

ADVISORY COMMITTEE

MAYS BUSINESS SCHOOL

Texas A&M University 2115 TAMU

College Station, TX 77843-2115

http://recenter.tamu.edu 979-845-2031

DIRECTOR

GARY W. MALER

MARIO A. ARRIAGA Conroe

RUSSELL CAIN Port Lavaca

ALVIN COLLINS Andrews

JACQUELYN K. HAWKINS Austin

DOUG ROBERTS, CHAIRMAN Austin

DOUG JENNINGS, VICE CHAIRMAN Fort Worth

BESA MARTIN Boerne

TED NELSON Houston

C. CLARK WELDER San Antonio

BILL JONES, EX-OFFICIO Temple

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