Despite the double-whammy of an oil price collapse and a global economic shutdown, the housing market in Texas is hotter than a stolen tamale.
New home permitting activity in Houston for the first half of this year is running at about the same level as it was in 2019, which is amazing enough. Sales at the largest and most active master-planned communities were up sharply in the first half of 2020 compared with the same period last year, which is nothing short of amazing.
New data from RCLCO show that sales shot up 21% at the Bridgeland community in Houston, up from 351 homes sold during the first half of 2019 to 425 in the first six months of 2020. Balmoral, a community in Houston developed by Land Tejas, is up 143%, and that’s off of an already high level of sales — 168 in the first half of 2019 and 409 sales in the first half of this year. Houston has become a highly diversified economy over the past thirty years, no longer dependent upon the oil extraction sector, and those industries that use oil as an input do better when oil prices go lower.
And it’s not just Houston. Austin master-planned communities are hotter than a fur coat in Marfa. Easton Park, by Brookfield Residential, saw a doubling of sales since early 2019. Sunfield, a development by Scarborough Lane, is up 33% in the first half, and Santa Rita Ranch, by Mariner Real Estate Development, is up 30%. These are incredibly strong increases, particularly during a period of economic disruption.
In Dallas, some new-home developments are moving even faster. Hillwood Communities’ Union Park master-planned community saw a 64% surge in sales, and Viridian, a community belonging to Johnson Development, saw a 37% increase. Johnson Development’s Trinity Falls project surged 65% in the first half. Also in Dallas, Wood Creek, by SouthStar Communities, sold 247 homes in the first half of 2020.
Demand is strong while supply is tight. The inventory of homes available for purchase remains extremely limited throughout Texas, and the shortage got worse during the current crisis. The biggest decline in listings has been in the Austin area were there were 32% fewer houses listed for sale in June compared with June 2019, according to the Texas Realtors’ Association. The low levels of supply are keeping prices high.
The concern on the demand side is of course the Covid wild card. Cases are surging in Texas, and this could still cause problems in the economy and in real estate, but so far the pandemic has not held back housing. Some builders report that people are more eager than ever to buy in their suburban communities in order to get away from crowded cities or to get out of a dense apartment building.