By Becky Collins • 2019 President
The Home Builders Association (HBA) of Greater Austin hosted the 2019 annual housing forecast on Jan. 17 at the AT&T Center. The program featured presentations by Eldon Rude, principal, 360° Real Estate Analytics, Julia Coronado, president and founder of MacroPolicy Perspectives and Mollie Carmichael, principal, Meyers Research LLC. The most comprehensive housing forecast in the region, it informed the crowd of over 700 HBA members, industry partners, REALTORS, elected officials and the media about the current state of the housing industry, market forces influencing housing prices and known indicators of what’s to come for the region.
Our presenters recapped that the robust job and population growth the Austin MSA experienced in 2018 resulted in another strong year overall for home builders in Central Texas. Even though new home sales in October and November fell below expectations due to several factors like weather delays, a spike in mortgage interest rates, uncertainty over the midterm elections as well as extreme volatility in the stock market, builders reported that sales rebounded in December. The highest demand for new homes was in the $200,000-$300,000 range, forcing builders to look farther from Austin’s core to find land that would accommodate homes at this price point.
As we look ahead to 2019, major tech companies are expected to continue their drive for growth this year, and Austin has emerged as one of the key cities most attractive to the industry for expansion. This growth will keep tech workers flowing into Austin in 2019. With prospects remaining positive for the local economy, builders will have another strong year as they try to keep up with the demand for new homes.
The biggest challenge facing builders in our market is related to affordability issues linked to rising home prices and higher mortgage interest rates. These factors could serve to limit how many homes will be built in the Austin region in 2019.
The overall message from the HBA’s 2019 Housing Forecast is that in 2019 the housing market will be steady with a projection of strong numbers similar to 2018. Coronado states, from a national perspective, a leveling off, but wanted to be clear; she was not talking about a recession in 2019. She explained national factors were causing more caution amongst businesses, with trade wars, the government shutdown and interest rates among the factors for concern.
Carmichael emphasized that no matter the economy, there are still people who need houses, so the key is identifying the people being served, what they want, and what can they afford. Builders are encouraged to make space more efficient, as affordability concerns result in smaller house sizes.
The HBA of Greater Austin offers many opportunities for real estate industry professionals to gain insight into the local housing market. We invite you to save the date now for the upcoming Land & Capital Summit on March 7. If you’re looking to network with builders, be sure to attend the Annual Crawfish Boil Builder/REALTOR Mixer on March 28. Details for both events can be found at www.hbaaustin.com. RL