Nicholas Rapp

Despite a lower average demand score for building lots from July (7.11) to August (6.97), eight of Metrostudy’s 35 regions of coverage received a high score of “9” in BUILDER’s demand index. Four Texas markets (Austin, Dallas-Fort Worth, Houston, San Antonio) have anchored a portion of the lot demand average for the past five months.

The top eight markets for lot demand fall in line with lot delivery numbers reported by Metrostudy in the second quarter. The home state of each market made the top 10 lot production states ranking, with Texas at No. 1. But the numbers tell all—despite producing 18,931 lots in the second quarter, new building starts have outpaced land development at 19,714.

We expect even higher scores in Texas markets in the short term, and the Rio Grande Valley is on our radar for development in the coming years. Rio Grande’s demand score was “1,” a stark contrast to other Texas markets. As lots begin to disappear in prime Texas regions, it’ll be interesting to see how much time passes before oversupply in Rio Grande starts to appeal to developers.