Metrostudy’s 2Q14 survey of the Rio Grande Valley housing market shows that the region continues to lag behind the rest of the state in terms of economic and housing activity. The annual rate of new home construction in the Valley in 2Q14 is 1,850 starts, up 12%, from 2Q13. The Rio Grande Valley had 430 starts in the 2nd quarter, up 18% over 2Q13. The number of new home closings in the year ending 2Q14 was 1,874, up 190 units, or 11.3%, over the 2Q13 rate of 1,684. There were 470 closings in the 2nd quarter, up 39% over 2Q13.
It is worth noting that the top 58 subdivisions ranked by annual starts [in this group a minimum of 9 starts] garnered a 54% share of the 2Q14 annual rate of 1,850. The remaining 387 subdivisions generate the other 46% share of annual starts. In that regard, there were 280 subdivisions that had fewer than 4 starts, including 129 that showed no starts over the past year.
Even as the RGV continues to lag the growth in the state as a whole, the analysis shows that there has been steady growth, a much needed improvement over the last few years, just not extraordinary. Inventories are improving, prices are rising, and there is a good pocket of construction in the most active subdivision group. For the near future, when observing the RGV housing market, the overall analysis will look somewhat mediocre while at the same time there will be a core group that generates more than 50% of all new home construction, holding tighter inventories and exhibiting better trends.
“There are still issues with excess housing inventories in both the new home and resale markets, in addition to the foreclosures that continue to dot the landscape,” said Inselmann. “Real recovery doesn’t expose itself until inventories are brought back in line with demand, and that still remains somewhere down the line. If recent history is the indicator, the future will be slow and methodical improving a little bit at a time, which at least is a good direction to be moving in.”