Total new-home closings: 26,192
The good: Prices are on the increase, along with total number of closings for 13 straight quarters.
The bad: Slumping oil prices erode confidence among some buyers, while increased competition spurs higher material prices and labor shortages.
The bottom line: Oil and gas companies make up just 10% of the region’s job gains, and lagging inventory among resale properties make this market an ongoing bull’s-eye. Houston’s ground is producing more than just black gold lately. The city’s ground also pumped out 6,383 new-home closings in the first quarter of 2015, marking the 13th quarter of steady increase for this market. As a result, sales roar at a rate that’s only bested by the area’s 2009 numbers (when builders discounted prices to dump inventories).
With increasingly high starts and development rates that are just now showing signs of catching up, builders spar over suitable lots and labor providers, while also contending with higher material costs. Nonetheless, with the first quarter of 2015 delivering roughly 1,000 more new lots than starts, lagging inventories among resale properties and rental rates rising in the region, builders continue to show confidence by putting up 6,655 starts in the first quarter of 2015, a slight increase over fourth quarter 2014. Add to that an unemployment rate that fell by nearly a full percentage point over the past year and this market proves it isn’t phased by lower oil prices.