Real estate in the Dallas area is tough to find – and part of that has to do with the number of people coming to the state overall, but supply of built housing and costs of materials for new construction also play a role.
In the first few months of this year, there were more than 88,000 permits issued for construction of new single-family homes in Texas, but it takes time to get from permit to built home, according to a June 1 article from WFAA.
Ted Wilson, owner of Residential Strategies, said that there are several things driving the current real estate surge. Some of those factors include more millennials looking for homes, mortgage rates hitting record lows and convincing more people that now is the time to buy, and more people moving to Texas for work.
“Since the first quarter 2019, housing starts in Dallas-Fort Worth have increased by 50% but the number of vacant lots hasn’t changed. So months’ supply has gone from a 24-month supply to a 16-month supply,” Wilson said.
Builders struggle to get their supplies and costs for materials are surging too. Residential Strategies surveyed builders recently and found that costs are up nearly 18% from what they were in 2020 at this point.
The National Association of Home Builders (NAHB) stated that the increase in supply costs can add more than $30,000 to a single-family home’s costs.
“This unprecedented price surge is hurting American homebuyers and home builders, and impeding housing and economic growth,” said Chuck Fowke, chairman of NAHB and a custom home builder from Tampa, Florida. He calls for policymakers to look at the lumber supply chain and find where the problems are, then fix them.
And, in May, the Census Bureau estimates showed that there were up to 373,965 more people living in Texas in 2020 than the year before, according to a report by the Houston Chronicle.
And, in discussion with Good Day on June 9, Nikki Barringer, a realtor with Dave Perry Miller, cited an article she read recently that said baby boomers who would have retired didn’t, due to the pandemic, which contributed to a shortage of available housing.
That of course, isn’t a problem for sellers who already have a new home to go to – and in some cases, Barringer said that even with the shortage of built housing, there are still buyers who are willing to give sellers time to find a new place.
“One of the interesting things is that we’re still getting people who are willing to give 30, 60 days, so you have time to go out and find a home,” she said.