North Texas experienced continued improvement in new home sales, new home closings, and new home starts in the first quarter of 2012 according to statistics from Dallas-based Residential Strategies Inc. This makes three consecutive quarters that market conditions have trended positive.
“With the solid results most homebuilders have been experiencing this spring, our expectation is that the increase in start activity will continue to manifest itself in the second quarter of 2012 as well,” said RSI principal, Ted Wilson.
In the past year, new home closings rose from 3,233 in the first quarter of 2011 to 3,572 in the first quarter of 2012.
New home inventory dipped a bit, dropping from 7,487 units to 7,439 units during the quarter. In particular, finished vacant housing fell from 3,314 to 3,070 during the first quarter; current levels represent a 2.5-month supply.
“Many builders have shared with RSI their intention of pushing prices higher this spring,” Wilson said. “Much of this decision is borne by the reality that the next generation of lots is trending higher in price.”
Price increases may be masked, however, by low mortgage rates. The 30-year mortgage rate stood at 3.98 percent as of April 5, 2012. A year ago, the 30-year rate was at 4.87 percent.
The vacant developed lot supply was reduced from 64,240 to 62,263 units—a decline of 1,977 lots—during 1Q12. The current supply represents a 52.5 month supply; more than double the 24-month supply that’s considered equilibrium.
Wilson said that many ‘A’ quality submarkets have returned to equilibrium, but ‘C’ and ‘D’ markets indicate that an oversupply of lots may continue for several more years. Because of this, lot development has resumed in many of the ‘A’ and ‘B’ quality submarkets. In the past year 7,410 new lots were delivered in North Texas.
Existing home sales have improved. According to the Texas A&M Real Estate Center, area MLS groups showed 82,720 sales for the 12-month period that ended February 2012. This marks an improvement of 2,845 units, or 3.5 percent, year-over-year.
Total listings at the end of February 2012 stood at 31,133 houses, a 4.5-month supply. This is under the six-month supply of existing homes that’s considered equilibrium.
Here are additional market notes from Residential Strategies Inc.:
• Economic indicators remain bright for Dallas-Fort Worth. According to the Texas Workforce Commission, for the 12‐month period ended November 2012, DFW created 57,300 net jobs, an increase of 1.97 percent. According to the Bureau of Labor Statistics, this ranks DFW as the No. 2 employment growth market in the nation, behind Houston, at 87,900 net jobs.
• For those that can qualify for a mortgage, the cost to finance a house continues to get cheaper. According to Freddie Mac’s weekly mortgage survey for Jan. 5, 2012 the average rate for a 30‐year mortgage was 3.91 percent. A year ago (Jan. a7, 2010) the average rate was 5.09 percent.
• According to the Texas A&M Real Estate Center, the DFW area saw an annualized resale rate of 80,530 homes through November of 2010, which is nearly equal to the annualized rate from a year ago. However, monthly resale figures continue to outpace those of 2010. During November of 2011, there were 6,071 resales, representing a 13.4 percent increase over the sales pace in November 2010 (5,352). The month supply of listing inventory is at a very healthy 5.03 months, where a 6‐month supply is considered
• Listing inventory has declined sharply over the last year, down to 33,774 total listings as of November 2011. There were 44,160 total listings on the market at the same time period a year ago, thus the current level represents a 23.52 percent decline in listings.