New home sales cool, but areas in The Woodlands still hot
As the new home market is showing signs of slumping across the U.S. and locally, there are indications that the impact of Hurricane Harvey will hurt sales by delaying new construction or discouraging people from buying.
As the new home market is showing signs of slumping across the U.S. and locally, there are indications that the impact of Hurricane Harvey will hurt sales by delaying new construction or discouraging people from buying.
On a national level, the U.S. Commerce Department reported Tuesday that sales of new homes dropped 3.4 percent in August, to a seasonally adjusted annual rate of 560,000 new homes sold. The national decline in August followed a 5.5 percent drop in July, although sales gains from earlier this year are keeping the year-to-date pace at 7.5 percent higher than a year ago.
In The Woodlands, Realtor Pat Moritz acknowledges the local slowdown and describes the impact of Harvey as “a cloud that’s settled over everybody.”
Moritz, who’s called the area home since 1981, says while buyers are still looking at homes, “the numbers are down and traffic is down.” She and others in the real estate business note the slowdown in demand for new homes comes during a time of year when the local real estate market usually hits a seasonal lull. Currently, the more motivated buyers, according to Moritz, are people who are moving to the area, or for some reason want to close right away.
“I don’t want to be negative,” Moritz said. “But the reality is it’s a different market and August and September are slow anyway.”
Moritz notes the strength in demand for new homes in The Woodlands is on the west side of the community, while John Anthony Brown, a member of The Woodlands Township Board of Directors and a licensed Realtor, says most of the residential construction left to build in The Woodlands is in the Creekside Park area in Harris County.
Moritz says there’s also demand for new homes to the north, including in Woodforest, a masterplanned community between The Woodlands and Conroe, as well as in Grand Central Park, a massive new development in Conroe.
And, she touts the Grogan’s Crest development, a gated community in The Woodlands where she’s selling new homes that she claims are “the best deal in Montgomery County.” With homes starting in the mid $300,000s, Moritz adds, the neighborhood has never flooded. REPORT: LABOR SHORTAGES COULD DELAY NEW HOMES
Meanwhile, Metrostudy, a residential data provider that tracks building and development locally and across the country, reports that although industry experts are fairly optimistic, the region’s housing market will recover from Harvey fairly quickly, the building of new homes could be delayed as developers face labor shortages for up to six months.
“They will need to rely on their relationships with subcontractors and suppliers in order to rebuild quickly,” Metrostudy’s Lawrence Dean, a regional director in Houston, said in a report posted on the group’s website.
“For any big builders to continue to operate as semi-usual, there’s going to be a lot of prostrating with their tradesmen and vendors to keep them focused on what they’re doing,” he said. “A diminished workforce, coupled with a tremendously increased demand for materials and skilled trades, definitely sets the stage for a more difficult, slower building process.”
As for Brown, he says it appears people flipping homes or doing other work are experiencing the longest delays.
“From what I’ve seen, the majority of delays have impacted those who were doing rebuilds (Flipping houses) or extensions to their properties within the affected areas,” he said. “Soaked grounds, ruined materials, loss of contractors, either because they too were impacted or have gone to another job site, all had a negative effect to their completion timelines. I would assume those who were in the middle of a new home purchase are being told that their move-in date probably has to be pushed back.”
As for new home building in The Woodlands, Metrostudy’s latest numbers show new home building in the community had been on the upswing, though their numbers only show the first two quarters of the year.
The firm, which tracks housing starts on a quarterly basis, shows there were 85 “starts” in The Woodlands in the second quarter of this year, compared to 53 during the same time last year. The number of second-quarter starts was also the best for any quarter in The Woodlands, according to the report, since the 97 starts in the first quarter of 2015.
DIRECTION OF HOME PRICES UNCLEAR
Meanwhile, although homes prices have been going up most of the year in the area and across Texas, their current direction is less than clear.
The Houston Association of Realtors reports in its latest monthly update, pricing of all homes across the Houston area -- not just new homes -remained “largely unaffected” by Harvey. HAR figures show that the single-family home median price for the area increased 3 percent to $231,700.
In a separate report, the association, referencing a U.S. Census Current Population Survey, notes a healthy percentage of homeowners in The Woodlands, with a 73 percent homeownership rate. That’s above the 62 percent homeownership rate for the state and is one of the highest rates in Texas.