Photo courtesy of Roy Luck.
2013 was a great year for Austin real estate, and that success is revealed in all aspects of the market, including new home construction. According to data from the housing information and consulting firm Metrostudy, there were 9,379 home starts in the Austin area in 2013. This is a 17.3% increase from the 7,981 home starts recorded in 2012. More importantly, this figure represents a recovery from a six year low of new home construction in the Austin area. 2007 was the last time Austin home starts were over 9,000, with 12,400 homes under construction that year. If the growth of the housing market continues to remain strong in 2014, we can look forward another year of increasing home starts in the Austin area.
Builders in the Austin area faced several challenges this past year to provide new homes to Austin residents. High interest rates, a low supply of available lots, extreme weather and the government shutdown all combined to make new construction more difficult for area builders. However, none of these factors could outweigh the continuing high demand for Austin homes. In this market, builders cannot build fast enough! New residents moving to the city are attracted to the area’s low unemployment rate and steady job growth. Austin is expected to add 29,000 new jobs in 2014. The low supply of available homes in the area makes new construction more important than ever.
In January 2013, experts predicted Austin area home starts to total between 8,800 and 9,600 for the year. The roughly 9,400 total home starts for 2013 clearly fell within this range. For 2014, experts are predicting home starts to reach a minimum of 10,000 to 10,500. Factors that could potentially stunt the growth of Austin home starts are rising interest rates, new mortgage qualification requirements and continuing lot shortage. If 2014 is anything like 2013, however, we can expect builders to overcome these potential hindrances and meet or surpass predicted numbers. This year will no doubt be another exciting year for Austin real estate.